Any gain early last week was taken away by Friday. As long as expected U.S. wheat ending stocks are above 700 million bushels and world wheat stocks are 6.7 billion bushels, wheat prices are going to have a hard time increasing.

About the only thing that could happen is for production to be less than expected in Argentina and Australia. Recent reports indicate lower production is not expected. Wheat exports for the U.S. 2009-2010 wheat marketing year are projected to be 6% less for the 2008-2009 marketing year. Current export shipments are 48% lower than last year. Hard red winter (HRW) exports are 62% lower.

The Kansas City Board of Trade (KCBT) July wheat contract closed Friday at $5.56/bu. Using an 80¢-under basis, the market is offering about $4.76 for harvest delivered wheat. This is compared to the KCBT December contract close of $5.17, the current basis of -80¢ and a cash price of $4.37. The spread between the December and July contracts implies that either the July wheat price must decline or the current price must increase. If HRW planted acres are relatively low, this price spread might be warranted.

No sign of increasing or decreasing
The December futures contract has support at about $5 and resistance at about $5.40. There is strong resistance at $5.62. The December contract price closed at $5.17, down 8¢. If the KCBT wheat contract price goes below $5, Oklahoma (Texas and other regional) cash wheat prices are expected to reach $4 and possibly $3.80. If wheat prices are bottoming out, the Dec. 1 price could still be $4.75.

Consider selling one-third of your wheat in late September, one-third in October and the final one-third in November. The odds of stored wheat producing a higher net price than the market offers today are about 50%. You may want to consider selling wheat now and covering some or all the sales with KCBT December call option contracts.