Three Looks of US Wheat


September Minneapolis wheat prices turned more volatile the past three months, but continue to challenge their highs, while crops have USDA’s lowest good-to-excellent rating since 1988 (DTN ProphetX chart).

MINNEAPOLIS WHEAT:

September Minneapolis wheat closed up 30 3/4 cents last week, ending at $8.38 3/4 Friday as spring wheat crops suffered another week of dry conditions and high temperatures. Moderate to heavy rains are in the forecast for eastern North Dakota and Minnesota and parts of the western Canadian Prairies, possibly making it difficult to trade through the 2017 high of $8.68 1/2. Technically, trading in September Minneapolis wheat became more volatile since April, but the price trend remains up, showing the most bullish potential of the three U.S. wheats. Traders will be watching USDA’s next WASDE report on July 12 for USDA’s first spring wheat production estimate of the new season.

KC WHEAT:

September KC wheat closed up 10 1/4 cents last week, ending at $6.19 1/4. USDA said 33% of winter wheat was harvested as of June 27 and progress likely picked up after rain disrupted Kansas and much of the Midwest early in the week. Prices are down sharply from their May 7 high of $7.45 1/4 and have chopped sideways for over a month with support at $5.92 1/2. Last week’s prices tried to trade above the 100-day average at $6.36 but failed with harvest pressure evident and export sales starting slow in the new season. High corn prices and this year’s drought in spring wheat areas are KC wheat’s best sources of support, but it is not clear if or how long weekly prices can hold above $6.00.

CHICAGO WHEAT:

September Chicago wheat closed up 12 cents last week, ending at $6.52 3/4 Friday. Like KC wheat, Chicago prices tried to trade above their 100-day average at $6.64 last week, but failed by Friday’s close, pressured by harvest progress and generally favorable crop conditions outside of North America. Technically, September Chicago wheat prices are down over a dollar from the May 7 high of $7.67 1/2. Also, like KC wheat, Chicago prices have leveled off the past month, but it remains to be seen if prices will hold support. A close in September Chicago wheat below $6.40, if it happened, would be bearish. Corn and spring wheat are bullish influences, but the larger perspective for world wheat leans bearish.

Comments above are for educational purposes and are not meant to be specific trade recommendations. The buying and selling of commodities and futures contracts involve substantial risk and are not suitable for everyone.

Todd Hultman can be reached at: Todd.Hultman@dtn.com

Follow him on Twitter @ToddHultman1



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