I am Stephen Davis, senior market strategist at Walsh Trading, Inc., in Chicago, Illinois. You can reach me at 312- 878-2391 and sdavis@walshtrading.com.
Prices of wheat are steady and trending higher in advance of a renewal of data from the United States Department of Agriculture (USDA) expected on Friday. U.S. wheat ending stocks are projected to rise by 867 million bushels, up from 844 million in September.
Top destinations for U.S. wheat were Mexico, Philippines and Taiwan according to recent weekly USDA export inspections. This is the only data available during the government shutdown.
There is a strong demand for wheat in the world. Egypt's new state buyer, Mostakbal Misr, is a major wheat importer. It bought 500,000 tons of wheat this week from Black Sea suppliers for shipments in December and January. Negotiations are reportedly underway for additional shipments.
Look at the 200-day moving average on the first chart. In my opinion, 583.3 is where the price of wheat is headed.
The expected reappearance of USDA World Agricultural Supply and Demand Estimates (WASDE) reports on Friday returns the focus to U.S. ending stocks. Technical considerations are bullish.
I like these charts. Any hint of China returning as a buyer could deliver a boost.
Corn and wheat are trading cousins and corn is going to $5, in my opinion. If corn goes up, you want to be long wheat.
An option trade strategy is to sell three January 2026 wheat 530 puts at 6.2 ($325 each option) With this premium in your account, buy one March 2026 wheat 570 call at 18. The January 2026 wheat option you sell expires on December 26, 2025.
A futures strategy is to buy one March 2026 wheat at 541.0, good until cancelled (GTC). That was the low on November 7. Have a sell stop at 531.0, GTC.
Profit objective is to sell at 561.0, GTC. You are risking one to make two, a good ratio.
To discuss future and options strategies, contact me anytime at 312-878-2391.
Have an excellent day.
Stephen Davis
Senior Market Strategist
Walsh Trading, Inc.
Direct 312 878 2391
Toll Free 800 556 9411
sdavis@walshtrading.com
www.walshtrading.com
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