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I am Stephen Davis, senior market strategist at Walsh Trading, Inc., Chicago, Illinois. You can reach me at 312-878-2391.
Chicago Wheat started the year at 513.0. On February 19, the price went above the 200-day moving average at 570.0 and has stayed there. Yesterday’s high was 603.0. Today’s closing price was 574.0. The longer term uptrend remains in place.
Geopolitical concerns in the world currently are driving wheat prices higher. So far we aren’t seeing significant wheat stockpiling tied to what is happening in the Middle East. However, such an increase in demand is also likely to drive prices higher.
May 2026 Chicago Wheat rallied yesterday and nearly filled the gap from last year’s early July price of 607.5. Fifty percent retracement to the 2025 high comes in at 597.0. Look for wheat to get above this 597 to 607 range.
An option strategy is to buy July 2026 Chicago wheat 580.0 – 680.0 call spread. We did some of these spreads today at 24.0 ($1,200). The maximum profit potential is $5,000 per contract. That is a very good risk/reward ratio in my opinion.
This is a long term strategy – the expiration date is June 26, 2026. If and when July 2026 Chicago Wheat gets above 600.0, that will propel more buying because traders who are short often have their stops above 600.0 even point. According to the Commodities Futures Trading Commission (CFTC) Commitment of Traders report dated February 24, managed-money traders are net short nearly 33,000 wheat futures contracts.
To discuss trading strategies, contact me anytime. Have an excellent day.
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
