Market Overview: Wheat (KW)

Though there are many different varieties of Wheat grown throughout the world, such as Soft/Hard/White/Red, there are only two main classifications of Wheat, winter and spring. Winter Wheat is planted in the winter and Spring Wheat is planted in the spring, hence the names. Each particular type of Wheat, Hard Red, Soft Red, Durum and White, requires slightly different climatic conditions for growth and is best suited for each type. The most prevalent class of Wheat grown in the Untied States is Hard Red Winter or Kansas City Board of Trade Wheat. Hard Red Winter Wheat is grown predominantly in Kansas, Nebraska, Oklahoma, and the Texas panhandle. The cold, sub zero winters and the general lack of precipitation make these regions of the country ideal for

Hard Red Winter Wheat production. The primary use of Hard Red Winter Wheat Flour is for bread making.

Seasonal Overview:

Tax selling of last year's crop has tended to weigh on prices at the beginning of the year, culminating in one of the best known seasonal tendencies in the grain markets, the "February Break". In recent years the February Break has tended to occur in late January and early February. During the production cycle of the Winter Wheat crop the predominant feature is fear that the crop will damaged, thus reducing yields. An old grain traders saying is “ Grain Crops are killed 3 times a year ” 

• Once during the Fall when it is too hot/cold/wet/dry for planting or the crop to emerge.
• Once during the Winter on fear of heaving, or radical changes in soil temperatures.
• Once during the spring on fear that it is too hot/cold /wet/ dry for pollination

After each destruction, prices tend to break as the market worries about the coming supply. It is normally the break from these lofty panic inspired levels that the trading opportunity lies.


Wheat (KCBT): (High: Dec-Jan//Low: Aug) With only hard red winter wheat deliverable, market is dominated more by commercial than speculative trade. Final low has more regularly (at least since 1976) occurred in August. This high-quality wheat has tended to lead

Chart courtesy of Moore Research Center, Inc.