***** Fundamental Analysis: The wheat market continues to suffer consistently bad news. The best one can say about the market is that both Chi. and K.C. nearby wheat futures are close to what should be good support levels. But Friday’s 303,700 ton weekly wheat sales continues to string of subpar business, although it isn’t getting worse. Monday’s 10.13 mln. bu. of inspections didn’t do anything to generate any buying interest. And Monday, it was said that France had sold some wheat to Mexico, a country that has a freight advantage in buying wheat from the U.S. And, on Monday, over 2300 contracts of wheat were tendered to be delivered against Chi. Dec. futures. K.C. deliveries were much lighter, only 198 contracts. Rain/snow has improved soil moisture in the Black Sea area, but is coming too late to boost growth ahead of dormancy. Increasing soil moisture is also helping prospects for our new winter crop. And the proposed elimination of export taxes and quotas in Argentina are expected to significantly boost wheat plantings during their coming fall. But even though there’s little positive, there’s really not much new that’s negative, but it does leave the trade looking for a reason to be a buyer; even to cover short positions.
***** Tech Comment: About the best one can say for Chi and K.C. wheat futures is that they are at a level that tends to discourage selling interest. But with funds already short, what this market needs is a reason for them to cover shorts. It needs a close over $5.00 on Chi. March futures to begin to suggest the market is turning up out of a 20-week low, with a close over $5.11 a better sign the trend has shifted. That would position in to test key resistance at $5.33-$5.38. But until $5.00 is cleared, there could be more testing of March’s $4.72 contract low. The break on December filled a gap at $4.75-$4.80 on the nearby chart, leaving it positioned to test last summer’s $4.55 low. But so far, the market has done nothing to alter the idea the $4.50-$4.60 support that has developed on the nearby chart won’t stop the decline again.
***** Basis Trends: Gulf SRW +50, stdy, HRW +20, steady, Corn Belt/SRW – stdy, Midsouth – stdy, Great Plains – stdy/up 1.
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