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NEAR-TERM MARKET FUNDAMENTALS: The current holiday-shortened week started on a firm note in wheat. This came in conjunction with a lower dollar and rallies in corn, the soybean complex and a number of other key markets. This follows the sideways price action seen in the wheat market last week. Traders report that a lack of sellers helped support the wheat market last week along with expectations of fund support from rebalancing after the start of the New Year. However, last week’s export sales were below trade expectations. Traders said that this is a continued reflection of the higher prices seen after the October-November rally which further reduced the competitiveness of US wheat on the world market, and interrupted a series of relatively strong weekly sales totals. The latest week’s net sales came in at 221,300 tonnes, all for the current marketing year. As of December 17, cumulative wheat sales stand at 65.5% of the USDA forecast for 2009/2010 versus a 5 year average of 74.5%. Sales of 347,000 metric tonnes are needed each week to reach the USDA forecast. The weak pace of sales for wheat compares to continued strong sales in soybeans and a surge of export sales for corn in recent weeks. Jordan is tendering for 100,000 tonnes of wheat for delivery in April. Egypt is introducing new strains of wheat that are resistant to a destructive mutation of an airborne stem rust fungus.
TODAY’S GUIDANCE: The wheat market has had every reason to continue its decline in recent days. The fact that it has not done so is due to a lack of selling which suggests that the market is far from overbought. It is not clear that we can count on funds to buy as heavily in January as traders seem to be assuming, but the recent move back above the 100-day moving average in the March contract suggests the possibility of a broader sideways pattern in coming weeks with a push up to the 545 area over the very short term. First support is at 524 in the March contract with next support near 515. First resistance is at 537 and then at 543 1/2 to 545.
Wheat Market Commentary – 2009.12.28
by Terry Roggensack on December 28, 2009
Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
NEAR-TERM MARKET FUNDAMENTALS: The current holiday-shortened week started on a firm note in wheat. This came in conjunction with a lower dollar and rallies in corn, the soybean complex and a number of other key markets. This follows the sideways price action seen in the wheat market last week. Traders report that a lack of sellers helped support the wheat market last week along with expectations of fund support from rebalancing after the start of the New Year. However, last week’s export sales were below trade expectations. Traders said that this is a continued reflection of the higher prices seen after the October-November rally which further reduced the competitiveness of US wheat on the world market, and interrupted a series of relatively strong weekly sales totals. The latest week’s net sales came in at 221,300 tonnes, all for the current marketing year. As of December 17, cumulative wheat sales stand at 65.5% of the USDA forecast for 2009/2010 versus a 5 year average of 74.5%. Sales of 347,000 metric tonnes are needed each week to reach the USDA forecast. The weak pace of sales for wheat compares to continued strong sales in soybeans and a surge of export sales for corn in recent weeks. Jordan is tendering for 100,000 tonnes of wheat for delivery in April. Egypt is introducing new strains of wheat that are resistant to a destructive mutation of an airborne stem rust fungus.
TODAY’S GUIDANCE: The wheat market has had every reason to continue its decline in recent days. The fact that it has not done so is due to a lack of selling which suggests that the market is far from overbought. It is not clear that we can count on funds to buy as heavily in January as traders seem to be assuming, but the recent move back above the 100-day moving average in the March contract suggests the possibility of a broader sideways pattern in coming weeks with a push up to the 545 area over the very short term. First support is at 524 in the March contract with next support near 515. First resistance is at 537 and then at 543 1/2 to 545.
Tags: Grains, Wheat
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