A bearish barrage hits the wheat market, analyst says
The Chicago wheat market is probing for a short-term low, and the reversal-type action yesterday could be a sign that one is in place.
The market still lacks a significant weather threat, but with other grains and oilseeds at very high prices, wheat may need a recovery bounce just to avoid losing too many acres.
With high-priced corn, traders are beginning to anticipate increased wheat usage for livestock feeding.
May Chicago Wheat closed moderately higher on the session yesterday, with an outside day higher close. This is coming from an extremely oversold level. July Kansas City Wheat also closed higher after first trading down to its lowest level since December 22.
Good weather helped to pressure the market, with improving crop conditions reported for Kansas and Oklahoma. There were also ideas of good production prospects for the Black Sea region. A strong rally in the U.S. dollar added to the bearish tone early.
Egypt is forecast to import close to 13.2 million tonnes of wheat for the 2021/22 season, about 200,000 tonnes more than in the current season, according to the USDA’s Foreign Agriculture Service.
July Chicago Wheat support comes in at the $6.21 to $6.20 zone, with $6.42 and $6.49 as resistance. July Kansas City Wheat support is at $5.83, with $6.08 and $6.20 as resistance. Consider buying a minor pullback.
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