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Wheat - Just My Opinion


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Weekly Wheat Export Sales old crop vs. 200-500 K T. expected new crop vs. 150-450 K T. expected

The push higher for quality milling wheat continues. Im not sure just how business is getting done but it is becoming evident that the buyers are not getting what they want bought. My guess is the best buying is coming from the managed sector. Im calling herd mentality. I do see a fair amount of global business happening but as I said its questionable as to how much business the US is getting. In recent days weve talked about individual hoarding now Im hearing about countries hoarding at least securing enough supply for their own citizenry.

Advertised basis levels for standard protein wheat run unchanged. This holds true in the interior as well as for export. Bull spreads move sharply higher in Chgo. Not only is there a push for quality milling wheat the lack of SRW quality further aggravates the situation. KC spreads improve but nowhere near the extent seen in Chgo. In Mpls spreads actually lost some ground.

So- have Chgo wheat prices gone high enough for the near term? Since March 16th May Chgo wheat has rallied just over 90 cents, July just shy of 80 cents. May KC wheat has rallied 85 cents in the same time frame while the July KC contract has rallied just over 80 cents.

I understand a good portion of the rally has been fear based. Given the dramatic rises in such a short period of time I have to say the rally is a bit overdone. Poor weekly export sales in the morning could be a rally breaker.

Daily Support & Resistance 3/26

July Chgo Wheat $5.50 - $5.75

July KC Wheat $4.85 - $5.12

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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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