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Wheat Market - Just My Opinion

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Last weeks short covering rally was prompted by excessive rainfall fears in the harvest ready areas of eastern Australia. Rain did occur over the weekend in the areas of concern but not as much as forecasted (so Im told). This and lower corn prices had wheat prices retreating from its Sunday night highs during the Monday day session. Weekly export inspections were deemed okay but still not of the market making variety.

Interior what bids if not steady are showing a higher bias. The higher bias, Im told, is coming from slow movement not an excess of demand. Chgo spreads saw little change on the day while KC spreads last fractionally (spreads being referenced are March forward).

Last Tuesday March Chgo wheat registered a reversal involving a new contract low ($4.24 ) closing higher on the day. Since then we have seen a succession of days featuring higher lows and higher highs looks like an upflag and todays lower close suggests the rally may be failing or at least a test of the support established early last week. The KC market has taken on a similar look. If what we are looking at are not upflags but just the beginning of support tests March KC wheat should be able to realize support from $4.28 to $4.26 and March Chgo wheat from $4.30 to $4.28.

Daily Support & Resistance for 12/05

March Chgo Wheat: $4.30 - $4.41

March KC Wheat: $4.28 - $4.40

Trading Futures is Risky - Never Risk More than what you have to Risk

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About the author

Tom Fritz is a third generation commodity futures trader. His grandfather and his father were traders on the exchange. Tom began his career in 1971 with Tabor Grain which was later acquired by Archer Daniels Midland. Prior to co-founding IFG in 1994 Tom was the lead Chicago Board of Trade floor analyst for ADM. He produces Just My Opinion, a daily grain commentary that is well respected and viewed all over the world.



Contributing author since 11/7/2017 

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