Below is a sample of our 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: Wheat continues in its sharp downtrend with traders indicating that a variety of fundamental and technical factors are lining up to push prices lower. Generally favorable harvest weather and soft export sales come at a time of improving crop prospects in Australia and a slight improvement moisture levels in some areas of drought-stricken Argentina over the weekend. A setback in crude oil and a slight firming trend in the dollar are also having a spillover negative effect from corn according to one trader. The Commitments of Traders Report for the week ending June 16th showed that funds were net sellers overall in wheat. Index funds were net buyers of 2,877 contracts while trend-followers were net sellers of 7,207. This increased the trend-followers’ net short position to nearly 22,000 contracts which is halfway back to their recent record large net short position of over 44,000 contracts. The winter wheat harvest advanced well into Kansas last week with some disappointing yields reported along with favorable test weights. Most hard red and soft red winter wheat harvest areas are expected to remain dry for the remainder of the week. Wheat prices were down again last week in Russia as importers appear to be awaiting the start of harvest according local sources. Harvest is expected to start in southern Russia in a few days. India is expected to allow the export of near 650,000 tonnes soon as the government buffer stocks reached a record 24.4 million tonnes as of mid-June. An Israeli group is tendering for 35,000 tonnes of feed wheat.
CASH NEWS AND TENDERS: An Israeli group is tendering for 35,000 tonnes of feed wheat.
WEATHER: Rain continued through the weekend from the NW corn and soybean belt into the north central Midwest. The next three days are expected to bring added rain with the heaviest amounts centered on northern Iowa and southern Minnesota and more moderate amounts blanketing the rest of Iowa, all of Wisconsin and the NW corn and soybean belts as well as much of Illinois and Indiana and on into parts of Kentucky and Tennessee. Ninety degree temperatures are expected today in all of the western Corn Belt and most of the NW as well as most of Illinois and the mid south and all of the Delta. The hot weather is expected to shift gradually east tomorrow and cover all of the Midwest by Wednesday. Longer term forecasts have largely eliminated the possibility of a hot weather “dome” over major growing areas. Most harvest areas are expected to be dry and warm to hot this week for both the hard and soft red wheat belts.
TODAY’S GUIDANCE: The sharp downtrend was extended into the overnight session with soft export sales and harvest progress keeping the pressure on from a fundamental standpoint. Trend-following funds seem to be signaling their intent to move back to a large net short position, and there is nothing in the fundamentals at this point to stop them. Tentative support is at 600 in the December contract today with added support at 595 and 575. Resistance is at 611 3/4 and near 624 and 630.
TODAY’S MARKET IDEAS: The market is still due for a short term bounce, but if funds remain sellers, we can push all the way down to the March-April lows without one.
