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NEAR-TERM MARKET FUNDAMENTALS: December wheat remained in this week’s narrow trading range yesterday and again overnight. Traders indicate that pressure from the advancing harvest and favorable hard red winter wheat yields in the US is being balanced by the expected downturn in Canadian production along with quality concerns for US soft red winter wheat and markedly improved demand on the export market in recent weeks. The US hard red winter wheat harvest is coming to an end in Oklahoma and it could be close to wrapping up in parts of Kansas by the end of next week. Export sales for wheat were strong again yesterday at 720,600 tonnes. This was well above the high end of trade expectations, and it marks the second week in a row of surprisingly strong US wheat sales. The biggest sale on the report was for 244,500 tonnes to an unknown destination. Sales need to average 374,000 tonnes each week to reach the USDA forecast. The International Grains Council raised its 2010/11 world wheat crop by 4 million tonnes to 664 million despite an expected downturn in Canadian production. They expect usage to increase by 4 million tonnes to stepped up feed wheat usage. Drier harvest weather is expected in many harvest areas into next week with the exception of scattered and mostly light showers in the Midwest this weekend. Traders report that an Israeli firm bought about 60,000 of Black Sea origin feed wheat. Tunisia bought 50,000 tonnes of wheat from a previously announced tender. This continues the recent trend toward stepped up demand for wheat from the Middle East and North Africa.
TODAY’S GUIDANCE: Improved demand and potential short covering by trend-following funds is supporting the wheat market for now. It may take a strong move one way or the other in the dollar to break the price deadlock. While the longer term outlook is still negative, the December contract could rally to near its 100-day moving average over the shorter term. That average sits at just over 530 this morning. First resistance remains at 517 1/4 in the December contract with further resistance near 526 to 527 1/2. First support remains near 491 1/2 in December with next support at 480.
Wheat Market Commentary – 2010.06.25
by Terry Roggensack on June 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: December wheat remained in this week’s narrow trading range yesterday and again overnight. Traders indicate that pressure from the advancing harvest and favorable hard red winter wheat yields in the US is being balanced by the expected downturn in Canadian production along with quality concerns for US soft red winter wheat and markedly improved demand on the export market in recent weeks. The US hard red winter wheat harvest is coming to an end in Oklahoma and it could be close to wrapping up in parts of Kansas by the end of next week. Export sales for wheat were strong again yesterday at 720,600 tonnes. This was well above the high end of trade expectations, and it marks the second week in a row of surprisingly strong US wheat sales. The biggest sale on the report was for 244,500 tonnes to an unknown destination. Sales need to average 374,000 tonnes each week to reach the USDA forecast. The International Grains Council raised its 2010/11 world wheat crop by 4 million tonnes to 664 million despite an expected downturn in Canadian production. They expect usage to increase by 4 million tonnes to stepped up feed wheat usage. Drier harvest weather is expected in many harvest areas into next week with the exception of scattered and mostly light showers in the Midwest this weekend. Traders report that an Israeli firm bought about 60,000 of Black Sea origin feed wheat. Tunisia bought 50,000 tonnes of wheat from a previously announced tender. This continues the recent trend toward stepped up demand for wheat from the Middle East and North Africa.
TODAY’S GUIDANCE: Improved demand and potential short covering by trend-following funds is supporting the wheat market for now. It may take a strong move one way or the other in the dollar to break the price deadlock. While the longer term outlook is still negative, the December contract could rally to near its 100-day moving average over the shorter term. That average sits at just over 530 this morning. First resistance remains at 517 1/4 in the December contract with further resistance near 526 to 527 1/2. First support remains near 491 1/2 in December with next support at 480.
Tags: Grains, Wheat
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