Wheat limits will expand to 90 cents at all three exchanges on Tuesday. Wheat is unable to disconnect from the other agriculture commodities and succumbed to the same liquidation mentality. Of significance for wheat, corn and soybeans was Monday's noon time CIF (cost of interest and freight) values, which were mostly steady to better signaling there remains demand at the US gulf for old crop supplies.
The Texas Winter Wheat conditions according to the Texas Statistics Service, in its weekly wheat condition report released Monday estimates the good to excellent conditions at 16% versus 14% a week earlier and compares to one year ago levels of 47% good to excellent.
Technically, the July CBOT SRWW has immediate technical support at 10400, with trend-line support of 10050 and resistance at 11350, the immediate trend is down. The July KCBT HRWW futures have technical support at 11360 and resistance of 11900, the immediate technical trend is also down. The July MGEX Spring Wheat futures have technical support at 12120 and resistance of 12710, the immediate technical trend is down as well.
Looking at the big picture, technically the new crop trend is shifting from sideways to down and remains down for MGEX wheat. Long term, Allendale remains supportive to new crop wheat futures based on how weak the 2008 winter wheat conditions went into dormancy last fall. The number of days of old crop stocks on hand, numbers 37, the lowest dating back to 1999-2000.
As long as the financial markets are stumbling and nervous, it could be difficult for any of the grain and soybean markets to shake this negativism in the near term.
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