June 22 Market Analysis: Wheat
Price action: July SRW rose 4 1/2 cents to $7.39, while December SRW wheat rose 6 1/2 cents to $7.70 1/2, nearer the session high and hit a three-month high. July HRW wheat fell 2 3/4 cents to $8.71, though December HRW wheat gained 1 1/2 cents to $8.73 1/4, near mid-range and hit a five-week high. July spring wheat closed 1 1/4 cent higher at $8.80.
Fundamental analysis: Wheat market bulls fared pretty well today given the solid losses scored in the corn and soybean futures markets. Market fundamentals presently lean bullish for wheat. Russia is 99.9% certain to quit the Black Sea grain-shipping deal in July because it no longer needs Ukrainian ports to export ammonia, according to a senior Ukrainian diplomat. Meantime, reports said India’s wheat crop production will be at least 10% lower than the government’s estimate. India’s government forecast its wheat crop at a record 112.74 MMT, but the head of the Roller Flour Millers’ Federation said production would be around 101 MMT to 103 MMT.
The key outside markets limited buying interest in wheat today, as the U.S. dollar index was higher and crude oil prices were sharply lower.
World Weather Inc. today reported U.S. hard red winter wheat areas “may be a little wet, but the situation will improve and most of the soft wheat in the Midwest is filling, maturing under favorable conditions.” Meantime, improved rainfall recently in western Canada’s Prairies and the Dakotas into western Minnesota “has improved or soon will improve topsoil moisture.” Improving rainfall in northern Europe and Russia’s eastern New Lands will improve soil moisture. Australia’s winter crop continues to establish well, said the forecaster.
The weekly USDA export sales report is out Friday morning, delayed one day by the federal holiday on Monday. Traders expect U.S. wheat sales of 100,000 to 400,000 MT in the 2023-24 marketing year.
Technical analysis: Winter wheat futures bulls have the overall near-term technical advantage. Prices are in uptrends on the daily bar charts. SRW bulls’ next upside price objective is closing December prices above solid chart resistance at $8.00. The bears’ next downside objective is closing prices below solid technical support at $7.00. First resistance is seen at today’s high of $7.77 1/4 and then at $7.90. First support is seen at today’s low of $6.54 3/4 and then at $6.50. The HRW bulls’ next upside price objective is closing December prices above solid technical resistance at $9.00. The bears’ next downside objective is closing prices below solid technical support at $7.90. First resistance is seen at today’s high of the May high of $8.90 1/4 and then at $9.00. First support is seen at today’s low of $8.63 1/2 and then at $8.50.
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