A bearish barrage hits the wheat market, analyst says

The wheat market records a hook reversal from being deeply oversold, 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.

Market ideas

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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For daily updates on cattle, hogs, corn, wheat, and the soy complex, visit hightowerreport.com.


*** This report includes information from sources believed to be reliable and accurate as of the date of this publication, but no independent verification has been made and we do not guarantee its accuracy or completeness. Opinions expressed are subject to change without notice. Any information or recommendation contained herein: (i) is not based on, or tailored to, the commodity interest or cash market positions or other circumstances or characterizations of particular investors or traders; (ii) is not customized or personalized for any such investor or trader; and (iii) does not take into consideration, among other things, risk tolerance, net worth, or available risk capital. Any use or reliance upon the information or recommendations is at the sole discretion and election of the subscriber. The risk of loss in trading futures contracts or commodity options can be substantial, and traders should carefully consider the inherent risks of such trading in light of their financial condition. Any reproduction or retransmission of this report without the express written consent of The Hightower Report is strictly prohibited.

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