Commentary

December Chicago wheat retracement support is at 569 then 566 and then 559 in my opinion. Chicago Wheat broke out last week as shorts ran for cover following escalations in the Eastern Europe conflict in my view. Russia struck a Ukrainian wheat vessel in the Black Sea in retaliation for a drone attack on Moscow. However, that risk premium was quickly sold off to start this week, as there was no follow through attacks over the weekend while weather turned friendly. It is my belief that beneficial rains in western Kansas overnight and more on the way for Kansas and Nebraska, could prove tough for the market to take out last week's highs until Black Sea prices show more strength. Speculators in my view can look for buying opportunities, even if prices test below today’s close at 5.75. Breaks must hold the 566-560 area in our view. Earlier today a Ukrainian drone attack on a major Russian ammunition depot triggered a blast so large it was picked up by earthquake monitors, forcing evacuations in a nearby town in Russia’s Tver region, roughly 300 miles from the Ukrainian border and 240 miles west of Moscow. We will see what measures Russia will take next in possible retaliation. Events seem to be escalating there, and funds could close out their remaining shorts off of heightened risks. However, this market most likely will not turn significantly higher until we see Black Sea prices start to rise. 

Trade Idea

Futures-N/A

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Risk

Futures-N/A

Options-N/A

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Sean Lusk

Vice President Commercial Hedging Division

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