Canada Markets

Perhaps there were some stories that arose this week that may bear watching, such as potential weather-related crop issues in Australia and a potential return of demand from Brazil, which ultimately lead to investor short covering through the week which was supportive for the market. Commercial traders, however, were sellers this week. Spreads weakened this week, such as seen in the lower study on the attached chart, with the Dec/Mar spread widening 5 3/4 cents this week to an 11 cent carry (March trading over the December, shown by the black line).

DTN's Five-Year Seasonal Charts indicate that the most active Chicago SRW price has tended to reach a short-term seasonal high in the current week, while it appears that the HRS contract tends to reach its short-term seasonal high in two weeks.

On the short-term daily charts (not shown) all three classes of wheat posted bearish outside trading bars today, with today's trading range exceeding that seen in previous days with a close near the session's low. This could signal a turning point and a change in short-term trend.

Looking at the weekly or intermediate charts, the December SRW contract posted its fourth consecutive higher weekly high this week only to see buying interest wane at the week's end which may coincide with the contract's seasonal high as seen on the five-year chart. The HRW weekly chart shows a third consecutive weekly high reached, with this week's high 1 cent higher than last week, while buying interest suddenly ended this session with HRW leading the three classes lower today.

As seen on the attached weekly HRS chart, this week's trade failed to move above last week's high with trade consolidating within last week's trading range to form an inside weekly trading bar, which indicates harmony between buyers and sellers but can also lead to a change in direction.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow Cliff Jamieson on Twitter@CliffJamieson

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