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NEAR-TERM MARKET FUNDAMENTALS: Strength in the other grain markets plus ideas that wheat consumption numbers will be strong if grain prices stay high relative to wheat has helped to support the run higher overnight. With the drought in the southern plains appearing to get more entrenched, there is now some growing concerns for next year’s winter wheat crop plantings plus increased concerns for the spring wheat crop if the weather remains hot and dry. For now, the crop is still improving. The Spring Wheat Conditions report showed that 73% of the crop was rated good/excellent compared to 73% last week and 82% last year. The 10 year average for this time of year is 64%. North Dakota conditions improved to 77% good to excellent. The winter wheat harvest report showed that 68% of the harvest is complete compared to 63% last week and 70% last year. The 10 year average for this time of year is 75%. The Farm Minister from India indicated that the 2011 crop harvest reached a record high 85.93 million tonnes, up from the previous estimate of 84.27 million. September wheat closed lower on the session yesterday but well up from the early lows. A recovery in corn and soybeans from the early lows plus a little less selling pressures than expected from the higher US dollar helped to support the solid recovery of more that 11 cents from the early lows. A jump in the US dollar along with weakness in other commodity markets helped to pressure futures early. The sharp set-back in the US dollar overnight plus the bounce in the other grains has helped support the more aggressive buying and a test of last week’s highs overnight. Talk that US wheat is still priced well above Russia wheat is seen as a limiting factor for the bulls. Weekly export inspections came in 18.73 million bushels which was lower than expected. Inspections need to average 22 million bushels per week for the rest of the season to reach the USDA projection. Jordon is tendering to buy 100,000 tonnes and Bangladesh is in the market for 50,000 tonnes.
TODAY’S GUIDANCE: For now, traders see the heat in the plains as beneficial to the spring wheat crop. Traders believe that breaks will attract increased interest from US livestock feeders. The market is likely to follow corn short-term.
TODAY’S MARKET IDEAS: Short-term support for September wheat is at 694 3/4 with resistance at 734 1/4 and 768.
Wheat: Likely to Follow Corn Short-Term
by Terry Roggensack on July 19, 2011
Below is a sample of The Hightower Report’s 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: Strength in the other grain markets plus ideas that wheat consumption numbers will be strong if grain prices stay high relative to wheat has helped to support the run higher overnight. With the drought in the southern plains appearing to get more entrenched, there is now some growing concerns for next year’s winter wheat crop plantings plus increased concerns for the spring wheat crop if the weather remains hot and dry. For now, the crop is still improving. The Spring Wheat Conditions report showed that 73% of the crop was rated good/excellent compared to 73% last week and 82% last year. The 10 year average for this time of year is 64%. North Dakota conditions improved to 77% good to excellent. The winter wheat harvest report showed that 68% of the harvest is complete compared to 63% last week and 70% last year. The 10 year average for this time of year is 75%. The Farm Minister from India indicated that the 2011 crop harvest reached a record high 85.93 million tonnes, up from the previous estimate of 84.27 million. September wheat closed lower on the session yesterday but well up from the early lows. A recovery in corn and soybeans from the early lows plus a little less selling pressures than expected from the higher US dollar helped to support the solid recovery of more that 11 cents from the early lows. A jump in the US dollar along with weakness in other commodity markets helped to pressure futures early. The sharp set-back in the US dollar overnight plus the bounce in the other grains has helped support the more aggressive buying and a test of last week’s highs overnight. Talk that US wheat is still priced well above Russia wheat is seen as a limiting factor for the bulls. Weekly export inspections came in 18.73 million bushels which was lower than expected. Inspections need to average 22 million bushels per week for the rest of the season to reach the USDA projection. Jordon is tendering to buy 100,000 tonnes and Bangladesh is in the market for 50,000 tonnes.
TODAY’S GUIDANCE: For now, traders see the heat in the plains as beneficial to the spring wheat crop. Traders believe that breaks will attract increased interest from US livestock feeders. The market is likely to follow corn short-term.
TODAY’S MARKET IDEAS: Short-term support for September wheat is at 694 3/4 with resistance at 734 1/4 and 768.
Tags: Grains, Wheat
About Terry Roggensack