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NEAR-TERM MARKET FUNDAMENTALS: Traders indicate that speculators in wheat have largely evened up ahead of today’s USDA reports. These reports are expected to be the major price factor in the early going although one analyst noted that the reports should be less of a factor in wheat than in corn or soybeans. Traders are generally looking from a very small increase in ending US stocks in light of softening export demand. Traders note that the dollar index and stocks may also be a significant factor today after yesterday’s sharp rally in the stock market. Wheat traders are also watching weather in the US hard red winter wheat belt. Overnight rains were concentrated in central and north central Texas and in eastern Oklahoma, leaving many dry areas to the west of these areas untouched. Further rains are possible in the next 4-5 days. Heavier rains have fallen over the central and southern Midwest. These are mostly beneficial although flooding is prevalent in some low-lying areas. The North China Plain is also expecting more rain through the end of the week and this should be beneficial. Saudi Arabia took delivery of its first wheat imports this week with a second delivery expected next week. The origin of the wheat is Canada. South Korea millers bought 43,100 tonnes of US wheat. Deliveries against the March futures contract were just 180 contracts today with the total for the month now at 18,933.
WEATHER: Overnight rains were concentrated in central and north central Texas and in eastern Oklahoma, leaving many dry areas to the west of these areas untouched. Further rains are possible in the next 4-5 days, but chances of further rain diminish after that. Heavier rains have fallen over the central and southern Midwest from yesterday through overnight. These are mostly beneficial although flooding is prevalent in some low-lying areas.
TODAY’S GUIDANCE: May wheat has pushed into substantial resistance formed during October through early December last year, and that may stall the advance from here. This resistance could all be swept aside by a sharp downturn in the dollar but, for now, the dollar remains near the highs for the year. Support today is at 523 1/2 and again at 512 in the May contract. Resistance is near 548 and 556.
