Grain Spreads: Wheat Leads

Sean Lusk General Commentary Leave a Comment

Commentary

Wheat continues to be the grain sector leader.  Paris milling wheat hit new highs overnight. La Nina rains in Australia are said to have hurt crop quality into harvest. This comes just as farmers were set to head into the fields and pull off a bumper harvest, heavy rain battered crops across major growing areas. Therefore Australian wheat was up $10 to $15 per ton as well.  Weather issues in not just Australia but around the world are aiding many wheat classes at the moment.  Drought is expanding in the US HRW area and regions of the Ukraine and Russia needs rain.  In my view as long as milling wheat futures remain in tight supply in the global export market, wheat will continue to be the leader and sharp breaks will most likely be bought by end users. HRW or KC futures extended a rally to nine-year highs after USDA’s latest weekly crop condition ratings showed unexpected deterioration in the winter wheat crop. USDA late yesterday reported the winter wheat crop condition at 44% “good” or “excellent” as of Nov. 21, down from 46% the previous week. Analysts expected the rating to hold at 46%. Wheat rated “poor” or “very poor” rose to 22% from 20%. Weekly ratings are very subjective here in the US. March is now the most actively traded contract and if one is to long the market at these lofty levels, I would focus on March or May22 contracts. Call me with questions or to discuss a game plan.

Trade Ideas

Futures-N/A

Options-N/A

Risk/Reward

Futures-N/A

Options-N/A

Please join me for a free grain and livestock webinar every Thursday at 3pm Central. Our next presentation will be Thursday December 2nd. We discuss supply, demand, weather, and the charts. Sign Up Now

Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.​

Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.​

All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall not be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.

Leave a Reply

Your email address will not be published. Required fields are marked *