Kansas City vs. Chicago Wheat Spread: A Tale of Two Markets

The Kansas City Wheat futures (KE) contract has been trading at an unusual discount relative to Chicago Wheat futures (ZW) in 2019. With the Dec 2019 KE contract trading at a 90 cent per bushel discount and the Dec 2020 KE contract trading at a 75 cent per bushel discount, the market’s current expectations imply continued tightness in the Chicago Wheat market compared to KC throughout 2020.