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Wheat - Just My Opinion

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Overnight Egypt buys 235 K T. of Wheat 60 K T. Polish, 175 K T. Russian Average price paid $249.38 (C&F) nearly $9.00 higher vs. Sept 2nd-3rd purchase

Weekly Wheat Export Sales old crop vs. 300-700 K T. expected new crop vs. none expected

Flat price wheat goes along for the ride with the overall strength in the US Ag complex. KC wheat continues to be the leader over Chgo wheat. Egypt paying up at last nights tender is a tell all that world wheat prices are not backing down. That in turn will keep our futures market relatively firm; at least not rolling over. Remember that US wheat futures are a follower, not a leader.

Interior cash wheat markets are quiet. HRW producers are busy with new crop planting not so much marketing. The HRW export basis continues to show a steady to firm bias while the SRW basis definitely looks easier if not lower. Chgo spreads dont do much while KC are showing a tightening bias.

Dec Chgo wheat continues to be in a downside corrective phase. Some may call the recent downdrift a downflag especially if they have a friendly bias to this market. Support is trying to materialize between $5.30 and $5.35. Im not seeing much upside potential on its own as $5.50 to $5.55 appears to be initial resistance. The Dec KC wheat chart has more of a positive look to it despite being in a minor corrective phase. The recent price action is a much better looking downflag as its not as deep vs. Chgos. Given the strength elsewhere in the Ag Complex I have to think wheat has been getting the short side of inter-market spreading especially the Chgo market. If World prices continue to firm the current downflags in the US markets will act as springboards to higher prices.

Daily Support & Resistance 9/17

Dec Chgo Wheat: $5.35 - $5.51

Dec KC Wheat: $4.69 - $4.82

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.


Contact me! Tom Fritz, Agricultural Market Analyst at 1.800.786.4475.

Learn more about International Futures Group at www.ifgfutures.com

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