Wheat - Just My Opinion

Dec Chgo Wheat closed 9.25 cents lower ($5.05.25), March 2.5 cents lower ($5.15.5) & July 2.25 cents lower ($5.25.5)

Dec KC Wheat closed 7.75 cents lower ($4.68.75), March 2.5 cents lower ($4.95.5) & July 2.25 cents lower ($5.17.25)

StatsCan Canadian Wheat Production 31.769 M T. vs. 31.019 M T. in September vs. 31.50 M T. USDA

Overnight Egypt buys 350 K T. of wheat 290 K T. Russian, 60 K T. Ukraine US origin was not offered

Weekly Wheat Export Sales old crop vs. 300-600 K T. expected new crop vs. none expected

Flat price US wheat futures continue to be in the doldrums due to a lack of business. Russia continues to be an aggressive seller as evidenced by its participation in the overnight Egyptian tender. US wheat wasnt even offered. Canadian wheat production from this past season continues to grow. Most major exporters winter crop appears to be in okay shape. Until we see Russia begin to slow its exports down US wheat will continue to struggle. Next weeks Supply-Demand update doesnt appear to be offering anything as trade guesstimates have the US carryout increasing by 7 million bu. and the World carryout increasing by 80 K T.

Interior wheat basis quotes ran unchanged on the day. The trend of the interior SRW basis is pretty flat looking while its export basis has a slight upwards bias. The March Chgo forward spreads eased fractionally with the flat price. The interior HRW basis runs unchanged on the day but with a slightly firmer trend. Its export basis is bouncing a bit from recent easiness. Any strength in any US wheat basis is from slow cash sales but with miller interest.

Both Chgo and KC are probing the interim support that was established last week. Mpls wheat is on the verge of pumping out new lows for its current lower trend. It seems like the only time US wheat futures rally is when it is being influenced by strength elsewhere; thats not friendly going forward. Remember that one of the functions of lower prices is to find business; evidently we have yet to find any.

Daily Support & Resistance for 12/07

Mch Chgo Wheat: $5.10 - $5.24

Mch KC Wheat: $4.90 - $5.06

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