Price action: July SRW wheat futures rose the 70-cent daily trading limit to $12.47 1/2, a two-month closing high. July HRW wheat also closed limit-up at $13.52, the highest on the continuation chart since February 2008. Expanded daily trading limits for SRW and HRW Tuesday are now $1.40. July spring wheat rallied 60 cents to $13.85 and posted a contract high for a fourth consecutive day, reaching $13.85.
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Fundamental analysis: Futures soared after India’s banned most wheat exports to manage domestic food security and prices, further stoking already heightened global supply concerns stemming from drought in the U.S. and South America and the war in Ukraine. India said it would still allow exports backed by already issued letters of credit and to countries that request supplies “to meet their food security needs.”
Traders will closely monitor the annual Wheat Quality Council tour of U.S. HRW wheat country that runs Tuesday through Thursday, mostly in Kansas. The tour will be extra important after USDA last week estimated the HRW crop at just 590 million bu., which would be the smallest since 1963-64, including a Kansas crop of 364 million bushels.
Wheat market watchers were awaiting this afternoon’s weekly USDA crop condition reports as of Sunday. The trade looked for U.S. winter wheat condition to be in 29% “good” to “excellent,” the same as last week and compares to 48% in that category last year. Forty percent of the U.S. spring wheat crop is expected to be planted as of Sunday, compared to 27% last week and 85% last year at this time.
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Technical analysis: Wheat market bulls have a strong near-term technical advantage. Six-week-old price uptrends are in place on the daily bar charts for winter wheat futures. SRW bulls’ next upside objective is closing July futures above solid resistance at the contract high of $12.78 1/4. Bears’ next downside objective is closing prices below solid support at $11.00. First resistance is seen at $12.78 1/4, then at $13.00. First support is seen at today’s low of $12.22 1/4, then at $12.00.
HRW bulls’ next upside objective is closing July prices above solid resistance at $13.00. Bears’ next downside objective is closing prices below solid support at this week’s low of $11.56 3/4. First resistance is seen at the record high of $13.84 3/4 hit in February 2008 and then at $14.00. First support is seen at today’s low of $13.25, then $13.00.
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