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Wheat Market - Just My Opinion

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Flat price wheat extends Tuesdays sell-off as Canadian wheat production data comes in higher than expected. Recent contract lows were challenged on todays break but manage to stand in. The ensuing trade, however, did not show much of a sign of rejection of these lows. Overall the recent two-day price performance is nothing short of downright ugly. For what it is worth - Bloomberg News survey for the Dec 12th Supply-Demand update is suggesting the US wheat carryout will increase by 4 million bu. and the World carryout will dip by 1.1 M T.

Most interior cash SRW markets remain quiet. Not much happens with the SRW export market. Chgo spreads went with the direction of the flat price; widening. Interior cash HRW markets continue to run steady to firm especially locations that are closer to the Gulf. HRW at the Gulf continues to climb but its all about the lack of movement not so much demand. KC spreads ran flat on the day. Since mid-August the March/July KC spread as traded between 28 cents under and 32 cents under.

I have to think new contract lows will be seen in relatively short order and given where we closed in proximity thats not saying much. Weekly Chgo wheat charts (based off of the Dec) suggest a smattering of support at the $3.94 level; thats another 4-5 cents lower. If it acts like a crummy market and it smells like a crummy market it must be a crummy market.

Daily Support & Resistance for 12/07

March Chgo Wheat: $4.20 (?) - $4.31

March KC Wheat: $4.18 (?) - $4.29

Trading Futures is Risky - Be Careful out There!!!

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About the author

Tom Fritz is a third generation commodity futures trader. His grandfather and his father were traders on the exchange. Tom began his career in 1971 with Tabor Grain which was later acquired by Archer Daniels Midland. Prior to co-founding IFG in 1994 Tom was the lead Chicago Board of Trade floor analyst for ADM. He produces Just My Opinion, a daily grain commentary that is well respected and viewed all over the world.



Contributing author since 11/7/2017 

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