MAR KANSAS CITY-CHICAGO WHEAT SPREAD (KEH27-ZWH27) – UPDATE
WALSH PURE SPREADER
Pure Hedge Division
RICH MORAN 10/13/2026
MAR KANSAS CITY-CHICAGO WHEAT SPREAD (KEH27-ZWH27) – UPDATE
This is a quick update on last Thursday’s (10/8’s) trade suggestion (please see below). I suggested trying to sell the MAR KANSAS CITY-CHICAGO WHEAT SPREAD (KEH27-ZWH27) at +53. This is not a “recognized spread”, meaning it is not listed as a spread-market on the exchange platform, so you need to leg into it. It opened up just below the +53 range and traded up into the range where it was very conceivable that it could be legged at +53 or just below if you missed your leg. My recommendation was, “Risk 12 cents (price of +65) or $600 Per Spread to make 24 cents (price of +29) or $1,200 Per Spread, plus fees and commissions”.
In just the three trading sessions since then (Fri, Mon, Tues) the spread traded down to +41 and settled today at +41¾. I don’t like to turn a winner into a loser. First of all, if you were able to get short the MAR KANSAS CITY-CHICAGO WHEAT SPREAD (KEH27-ZWH27) near +53, I would move your stop down to where you got short, for a scratch. If are short more than 1 spread, I would move the bid for half of your spreads up to +41 to make 12 cents or $600 Per Spread. That is what you were initially risking on the trade, plus fees and commissions. Leave the bid for the other half of your position at the original price of +29. If your short position is 1 KEH27-ZWH27, I suggest trying to buy it back at +41.
Thursday (10/8/2026):
MAR KANSAS CITY-CHICAGO WHEAT SPREAD (KEH27-ZWH27)
Hard Red Winter Wheat minus Soft Red Winter Wheat is more commonly known as the Kansas City-Chicago Wheat Spread. These wheats are similar, however they are used for different end products. Kansas City (Hard Red Winter) Wheat is used for all-purpose flour and is found in breads and noodles. It forms a stronger, more elastic dough. Chicago (Soft Red Winter) Wheat is found in cakes, cookies and pastries.
History tells us that it is very common for the difference in price (the spread) between these two wheats to be on either side of zero. That being said, Kansas City Wheat is generally a little more expensive.
There was a lot of bad news this past year for Kansas City Wheat so it has been priced at a higher premium than usual. Last October on Halloween (10/31/25) the MAR KANSAS CITY-CHICAGO WHEAT SPREAD (KEH27-ZWH27) opened up trading at +13½. As the hot and dry weather persisted in the region and Kansas City Wheat’s troubles became more and more apparent KEH27-ZWH27 traded higher and higher until it made it’s 52-week high of +79½ on August 18th. After that, it bounced around between +55 and +75. It could not find a direction by staying above or below the 14-day and 21-day moving averages. Finally on September 21st KEH27-ZWH27 settled below both of these moving averages and has not traded above or settled above either of them since. That includes today’s settlement of 51¼.
I think selling this spread with a stop slightly above the 14-day and 21-day moving averages could be a good risk reward trade.
I am suggesting that we try to sell KEH27-ZWH27 at +53. That is 1¾ cents above today’s settlement and a little below both of our two moving averages.
Risk 12 cents (price of +65) or $600 Per Spread to make 24 cents (price of +29) or $1,200 Per Spread, plus fees and commissions.
If you have any thoughts/questions on this article, or any questions at all in regard to the commodities futures markets, please use this link Sign Up Now
Rich Moran
Senior Commodities Broker
Direct: (312)985-0298
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
Futures and options trading involve substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.