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NEAR-TERM MARKET FUNDAMENTALS: The wheat market again ran out of selling on a push to new lows for the year yesterday, much as was the case in early-to-mid March. This came despite a sharp rally in the dollar and generally favorable weather and weather forecasts for all major wheat producing areas including spring wheat areas in the northern Plains. A private forecast out yesterday called for spring wheat plantings to be near 13 million acres this year, down 2% from last year. Australia’s Bureau of Statistics reports that wheat stocks held by bulk handlers fell in February by 8.7% versus January. This left stocks at 15.56 million tonnes. In yesterday’s action, the May wheat contract eased during the overnight session to a new low for 2009, but failed to extend its losses at the start of the day session despite big run up in the dollar. Prices recovered to higher on the day into mid morning before easing again into early afternoon. Wheat lost ground to corn on a late rally in corn. Prices remained in the top end of yesterday’s range into this morning. Traders reported yesterday that an unknown quantity of Russian wheat has been sold to Peru and Venezuela. If confirmed, this would mark an encroachment by Russian wheat into another traditional US wheat market. In recent years, Russia has dominated sales to key markets in the Mediterranean Basin, particularly in Egypt where the US has been all but eliminated from the world’s largest wheat import market.
TODAY’S GUIDANCE: The USDA will release its latest weekly Export Sales report this morning. Sales need to average 183,000 tonnes each week to reach the USDA’s export projection for 2009/10. They have been running above the average needed for most of this year and this has allowed the cumulative wheat sales total to finally push above the 5-year average for this point in the marketing year. We continue to look for the May contract to push through the early October low at 472. However, this may be a short term buying opportunity due to a lack of selling in wheat that may be tied to the fact that trend-following funds are still heavily net short in this market. Light support remains at 472 in the May contract with next chart support at 450. First resistance is near 492.
Wheat Market Commentary – 2010.03.25
by Terry Roggensack on March 25, 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 again ran out of selling on a push to new lows for the year yesterday, much as was the case in early-to-mid March. This came despite a sharp rally in the dollar and generally favorable weather and weather forecasts for all major wheat producing areas including spring wheat areas in the northern Plains. A private forecast out yesterday called for spring wheat plantings to be near 13 million acres this year, down 2% from last year. Australia’s Bureau of Statistics reports that wheat stocks held by bulk handlers fell in February by 8.7% versus January. This left stocks at 15.56 million tonnes. In yesterday’s action, the May wheat contract eased during the overnight session to a new low for 2009, but failed to extend its losses at the start of the day session despite big run up in the dollar. Prices recovered to higher on the day into mid morning before easing again into early afternoon. Wheat lost ground to corn on a late rally in corn. Prices remained in the top end of yesterday’s range into this morning. Traders reported yesterday that an unknown quantity of Russian wheat has been sold to Peru and Venezuela. If confirmed, this would mark an encroachment by Russian wheat into another traditional US wheat market. In recent years, Russia has dominated sales to key markets in the Mediterranean Basin, particularly in Egypt where the US has been all but eliminated from the world’s largest wheat import market.
TODAY’S GUIDANCE: The USDA will release its latest weekly Export Sales report this morning. Sales need to average 183,000 tonnes each week to reach the USDA’s export projection for 2009/10. They have been running above the average needed for most of this year and this has allowed the cumulative wheat sales total to finally push above the 5-year average for this point in the marketing year. We continue to look for the May contract to push through the early October low at 472. However, this may be a short term buying opportunity due to a lack of selling in wheat that may be tied to the fact that trend-following funds are still heavily net short in this market. Light support remains at 472 in the May contract with next chart support at 450. First resistance is near 492.
Tags: Grains, Wheat
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