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NEAR-TERM MARKET FUNDAMENTALS: The wheat market posted a strong gain yesterday before closing near the highs of the day. This took the March contract to the highest levels since December 4th. Prices then eased overnight in conjunction with a stronger dollar. Wheat traders indicate that they are still focused on the prospect of fund buying in wheat to start the year and they report that funds were, in fact, buyers again in wheat yesterday. Spreaders were also buyers in wheat against corn yesterday as that spread continues to adjust to the advance in wheat prices. The Canadian Wheat Board raised its estimate of 2009/10 wheat exports by 2 million tonnes yesterday to 13.5 million tonnes which would take them to their highest level in 10 years. The CWB also said that their export number could be boosted again due to improving marketing conditions. Cold weather across most of the US winter wheat belt is causing some minor concern over the possibility of winterkill, although traders note that snow cover is adequate in many areas with more snow hitting the central and northern Plains by yesterday. Lesser amounts of snow are expected across a broad swath of the Midwestern soft red wheat belt by today which would also help to protect the dormant crop. The USDA will issue its latest Export Sales report today. Traders are expecting a total as high as 500,000 tonnes which would be well above the weekly average of 345,700 tonnes that is needed to reach the USDA’s export projection for the 2009/10 marketing year. Australia’s Bureau of Meteorology forecasts a decline in the current El Nino into autumn. It is now summer in the Southern Hemisphere.
TODAY’S GUIDANCE: Fund buying continues to support wheat with a possible additional assist coming from the likelihood of a substantial reduction in US soft red winter wheat acres this year. Weather is not a significant factor given the wide-ranging snow cover, but colder than usual temperatures in the south may cause some concern if there is a freezing and thawing pattern. First support is at 554 3/4 in March wheat today and then at 550 in March. Next support is at 543 1/2 to 545. First resistance is near 569 1/4 and then at 580.
Wheat Market Commentary – 2010.01.07
by Terry Roggensack on January 7, 2010
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 wheat market posted a strong gain yesterday before closing near the highs of the day. This took the March contract to the highest levels since December 4th. Prices then eased overnight in conjunction with a stronger dollar. Wheat traders indicate that they are still focused on the prospect of fund buying in wheat to start the year and they report that funds were, in fact, buyers again in wheat yesterday. Spreaders were also buyers in wheat against corn yesterday as that spread continues to adjust to the advance in wheat prices. The Canadian Wheat Board raised its estimate of 2009/10 wheat exports by 2 million tonnes yesterday to 13.5 million tonnes which would take them to their highest level in 10 years. The CWB also said that their export number could be boosted again due to improving marketing conditions. Cold weather across most of the US winter wheat belt is causing some minor concern over the possibility of winterkill, although traders note that snow cover is adequate in many areas with more snow hitting the central and northern Plains by yesterday. Lesser amounts of snow are expected across a broad swath of the Midwestern soft red wheat belt by today which would also help to protect the dormant crop. The USDA will issue its latest Export Sales report today. Traders are expecting a total as high as 500,000 tonnes which would be well above the weekly average of 345,700 tonnes that is needed to reach the USDA’s export projection for the 2009/10 marketing year. Australia’s Bureau of Meteorology forecasts a decline in the current El Nino into autumn. It is now summer in the Southern Hemisphere.
TODAY’S GUIDANCE: Fund buying continues to support wheat with a possible additional assist coming from the likelihood of a substantial reduction in US soft red winter wheat acres this year. Weather is not a significant factor given the wide-ranging snow cover, but colder than usual temperatures in the south may cause some concern if there is a freezing and thawing pattern. First support is at 554 3/4 in March wheat today and then at 550 in March. Next support is at 543 1/2 to 545. First resistance is near 569 1/4 and then at 580.
Tags: Grains, Wheat
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