Canada Markets

March Spring Wheat Ends Week near Recent Highs

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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The March MGEX spring wheat weekly chart shows trade backing away from last week's high although remaining close to the top of the range traded over the past 10 weeks. Spreads changed little over the week (second study) showing a neutral commercial sentiment, while the third study reflects sideways momentum. (DTN graphic by Nick Scalise)

March spring wheat had a positive showing today, ending the day up 1/2 cent at $5.92/bu despite a significant rally in the U.S. dollar. Over the week, the contract lost 4 3/4 cents after falling short of a test of last week's high of $6.02 1/4/bu.

Last week's trade, indicated by the Nov. 10 weekly bar, appears as a bullish outside week, with weekly trade engulfing the range of the prior week while closing near the top of the range. This enthusiasm failed to carry forward into this week, with losses seen in the first three days of this week with a partial recovery on Thursday and Friday.

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This week's low came close to a test of support of the 50% retracement of the rally which began Oct. 1 and ended Nov. 14, which is found at $5.71 1/2. Additional support also was found at the contract's 50-day moving average, found at $5.73 1/2 Nov. 19 when this week's low was reached.

Commercial sentiment remained neutral this week, while CFTC data (not shown) indicates that the non-commercial traders or investors have been supportive buyers, increasing their net-long position by 620 contracts to 3,751 contracts, the first increase seen in eight weeks. Investors also reduced their net-short position of the more actively traded Chicago SRW contract by 30.4% to the lowest level since mid-June, suggesting that they may be slowly becoming friendlier to wheat.

Potential resistance for this market lies at last week's high of $6.02 1/4/bu, as well as the 100-day moving average at $6.08/bu. Should the market clear these hurdles, the 33% retracement of the move from the May high to the October low is $6.38/bu which could be viewed as a potential target. Given failure to move above resistance, support may be found at the contract's 50-day moving average which has acted as a floor twice in the past eight sessions, currently calculated at $5.73 1/4/bu.

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

Follow Cliff Jamieson on Twitter @CliffJamieson

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