The recent price correction in Wheat futures appears to have ended this afternoon, with continued wet weather in the southern Great Plains delaying the Hard Red Winter Wheat harvest and supporting prices. The lead month July futures briefly touched the 30-cent limit this morning, with strong commodity fund buying and local short-covering responsible for the sharp gains. Today's rally erased all of yesterday's steep losses from weather forecasts calling for hot and dry conditions in the southern Plains. However, last night's thunderstorms were heavier than expected, causing the Wheat fields to remain too wet to harvest. In addition, initial reports of disappointing yields in Oklahoma have traders concerned that USDA estimates for US HRW Wheat may need to be lowered at a time when world ending stock are at 30-year lows. Taiwan announced it purchased nearly 90,000 metric tons of US Wheat, which also provided some support. Yesterday's low at $5.78 1/4 in July Wheat is now seen as solid support, with resistance found at contract highs of $6.19 1/4. July Wheat closed at $6.05, up 24 cents.
New-Crop December Cotton soared to its highest levels of 2007, as short-covering by commodity funds, buy-stops, and aggressive bear spreading sent prices soaring. Traders report heavy buy-stop activity triggered after the December contract went above recent highs of 59.80. Spread trading was very active, with bear spreading of July/December the prominent trade. Some analysts believe Cotton prices need to head even higher in order to pull ample acreage away from Soybeans or Corn. The next resistance point for December Cotton is seen at 6250, with support found at 5865. December Cotton closed at 6142, up 232.
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