Wheat - Just My Opinion

Dec Chgo Wheat closed 4.5 cents lower ($5.10.50), March 4 cents lower ($5.31.25) & July 3.25 cents lower ($5.48.75)

Dec KC Wheat closed 3.25 cents lower ($5.16.25), March 3 cents lower ($5.40.25) & July 3 cents lower ($5.58.50)

US wheat futures sag with the rest of the Ag sector on Wednesday. World prices are quiet for now and the lack of upside momentum has attracted some selling. If trader expectations for the USDA report tomorrow are correct, slightly higher US carryout and World carryout, we dont have much to look forward to. Early today Russia increased its wheat crop expectations to 68.0-69.0 M T. This is still shy of the most recent USDA projection of 71.0 M T. Russia went on to say they are still on target to export 30.0-35.0 M T. of wheat. The most recent USDA projection of Russian wheat exports has them down for 35.0 M T. In other words if the Russian export expectations are correct US wheat will continue to play second fiddle in the World wheat export market.

Advertised basis levels for cash wheat remain unchanged. This holds true for domestic and export markets. Spreads sagged in both Chgo and KC. Spreads ran softer Chgo due to its greater volatility vs. KC.

Price charts continue to suggest wheat futures are a trading range affair. Interim uptrend lines, however, are getting challenged. Daily momentum indicators have shifted out of the recent sideways and are now hinting at lower. Shorter term technical indicators, inter-day charts, suggest further downside maybe limited from a time frame standpoint. I would think there are sell stops in Dec Chgo wheat below $5.05. It would not surprise me to see a head-hunt at those stops. My bottom line US wheat futures have limited upside potential at this time.

Daily Support & Resistance for 10/11

Dec Chgo Wheat: $5.05 (?) - $5.30

Dec KC Wheat: $5.07 (?) - $5.35

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.