Price action: March SRW wheat rose 17 1/2 cents to $7.98. March HRW wheat rose 15 cents to $8.23. March spring wheat gained 5 1/4 cents to $9.57 1/4.
Fundamental analysis: Ongoing Russia-Ukraine tensions supported wheat prices, with U.S. officials warning of an imminent Russian invasion of Ukraine. Both Russia and Ukraine are major wheat exporters, and a sustained conflict could disrupt exports out of the Black Sea region. Today’s price gains raise the question of whether a “buy-the-rumor, sell-the-fact” scenario is setting up if Ukraine is indeed invaded. Markets generally factor in worst-case scenarios regarding expected major geopolitical events, and if that doesn’t happen, prices typically correct the other way.
USDA today reported net weekly U.S. wheat sales of 118,100 MT for 2021-22, up 39% from the previous week but down 61% from the prior four-week average. For 2022-23, net sales totaled 10,500 MT. Old-crop sales were at the low end of market expectations. So far in the 2021-22 marketing year, wheat export commitments are running 25% behind a year ago, versus 24% last week. USDA projects exports in 2021-22 at 810 million bu., down 18.3% from the previous marketing year.
Also today, the U.S. Drought Monitor has reported winter wheat considered in drought condition increased one point, to 72%, for the week ended Feb. 15. The International Grains Council left its global wheat production estimate in 2021-22 unchanged at 781 MMT, slightly above 774 MMT in 2020-21.
Technical analysis: Winter wheat bulls hold a near-term technical advantage amid choppy trading. SRW bulls’ next upside price objective is closing March futures above solid resistance at the January high of $8.31 1/2. Bears’ next downside objective is closing prices below solid support at the January low of $7.35 1/2. First resistance is seen at this week’s high of $8.13 1/2, then at $8.24. First support is seen at $7.85, then at this week’s low of $7.73.
HRW bulls’ next upside objective is closing March futures above solid resistance at the January high of $8.49 1/4. The bears’ next downside objective is closing prices below solid support at the January low of $7.43 3/4. First resistance is seen at $8.31, then at this week’s high of $8.44 1/4. First support is seen at $8.10. then at this week’s low of $7.97 1/4.
For detailed advice and marketing plans, start a Pro Farmer trial.
