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NEAR-TERM MARKET FUNDAMENTALS: In a light day for news, wheat was higher overnight with some traders and analysts crediting the strength to a substantially lower dollar and general inflationary concerns. The overnight gains in wheat accelerated late in that trading session, with the December contract taking out yesterday’s highs in the process. The weekly Crop Progress report from the USDA showed the US Spring Wheat Harvest at 85% complete compared to 69% last week and 96% last year. The 10 year average for this time of year is 89%. Winter wheat planting progress stands at 24% complete, up from 13% last week and ahead of 20% last year. This is about in line with the 10 year average of 25%. Recent showers have been beneficial to newly planted winter wheat, and conditions are expected to remain favorable into this weekend. The UN Food and Agriculture Organization reports that Somalia may be on the verge of another humanitarian food crisis due to drought, warfare and large scale population displacement.
TODAY’S GUIDANCE: December wheat is still hovering near contract lows. There is little to stand in the way of a modest new contract low, but there is also little standing in the way of a bounce to near 485 to 490 in the December wheat contract. First support remains at 451, although a test of this level would probably push the market into some sell stops and result in a minor new low. First resistance runs from 467 1/4 to 471 1/2. Next resistance remains in a zone from 485 to 495.
TODAY’S MARKET IDEAS: Short-term traders can wait for better positioning.
