Morning Wheat: Close Back Under 772 Would Turn Chart Pattern Bearish
March wheat is well off of the overnight highs, but the market is still showing an inside trading day. Egypt is tendering for wheat and traders will monitor the situation closely. Critical support for March wheat is at 772. March wheat closed sharply lower on the session yesterday and has already given back more than half of the rally from January 14 to the 25th. While exports came in well above trade expectations, the continued strong advance in the US dollar helped to pressure wheat and many other commodity markets.
There continues to be less fear of a slowdown in wheat exports from the Black Sea region due to the Ukraine/Russia confrontation. The weekly export sales report showed that for the week ending January 20, net wheat sales came in at 676,681 tonnes for the current marketing year and 60,000 for the next marketing year for a total of 736,681. This was well above trade expectations and the highest in 14 months. Cumulative sales have reached 76.6% of the USDA forecast for the 2021/2022 marketing year versus a 5 year average of 78.1%. Sales need to average 165,000 tonnes per week to reach the USDA forecast.
TODAY’S MARKET IDEAS
Profit-taking due to a standstill in new news out of the Russia-Ukraine border helped to spark selling pressures this week and the surge higher in the US dollar has added to the short-term bearish tone. March wheat close-in resistance 794 1/2, with 772 as support. A close under support will turn the charts bearish and suggest a test of the January 7th lows.
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