Wheat market uptrend continues, analyst says
The wheat market remains in a choppy and volatile minor uptrend.
U.S. weather will become more and more important in the weeks just ahead and, in the short term, traders will monitor winter wheat conditions in areas that didn’t have enough snow cover for the intense cold last week.
National winter wheat ratings as of November 30 showed 46% of the U.S. crop in good/excellent condition. State reports this week (as of February 21) showed Kansas winter wheat rated 40% good/excellent vs. 43% the previous week and 35% one year ago. Nebraska ratings were 34% good/excellent, unchanged from the previous week and still down from 69% a year ago. Oklahoma crops rated good/excellent came in at 48% good/excellent, down sharply from 61% the previous week but higher than 46% a year ago.
May wheat managed to close slightly higher on the session Tuesday. It experienced the highest close since January 19, after being lower for most of the session. July Kansas City wheat traded up to its highest level since January 19, before closing moderately lower on the session. December Minneapolis wheat closed slightly lower on the day, after making a new contract high.
The Philippines is tendering for 145,000 tons of milling wheat. After favorable rains in early winter, precipitation since mid-January has renewed concerns about a return to drought in northwest Africa, the USDA said in weekly weather report. Rainfall in the 30 days through February 20 was less than 50% of normal in much of Morocco. Moisture in Algeria was 25% or less of normal, and inland Tunisia has been dry. Traders believe Ukraine had good snow cover for cold weather.
May Chicago Wheat short-term support is at $6.70 and $6.58, with $6.93 and $7.18½ as next upside target. July KC Wheat support is at $6.51 and $6.45, with $6.81¾ as the next upside target.
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