Wheat was sharply higher on a bullish USDA report and general commodity buying driven by a weaker dollar.
The Chicago May wheat contract was up 24 1/4 for the day and 38 cents for the week. Funds purchased an estimated 5,000 contracts today with trade volume being heavier than normal. With a weaker U.S. dollar, funds seemed to be big buyers in the commodities markets today as both the energies and metal markets were sharply higher.
A great week was seen with the May contract picking up 44 cents.
Wheat rallied on strong exports and on the coat tails of the corn market which traded limit up at one time today.
Closing Corn Commentary
A strong weekly soybean close should keep the bull fed for now. We are targeting 1450-1475 in the short term on the March contract.
The wheat market seems to have fundamental support. The wheat sold off today on index rebalancing and profit taking. The profit taking seems to be coming after the winter holidays instead of the end of the year profit taking that was expected. The March Chicago dropped 1.9% today. It is estimated that the funds sold 8,000 contracts today with 4,000 of these contracts being attributed to index rebalancing. For the week, March Wheat was down 22 1/4. This was the first weekly decline since the week ended Dec 12, 2010.
Going into the end of the year there should be no surprise to see it end the way we have seen it trade for the entire second half, bullish. Market mentality is that funds will move back into the corn, buying it aggressively to start the New Year. It may be more accurate to look at this market year on year to start and end on the Jan report rather than years end. It appears we have come full circle.