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Price action: July SRW wheat futures rose 1 3/4 cents to $6.22 1/4 and nearer the session low. Prices hit a three-month high today and for the week, July SRW gained 55 1/2 cents. July HRW wheat futures rallied 13 3/4 cents to $6.54 1/4, nearer the session high and hit a four-month high today. For the week, July HRW rose 71 1/4 cents. July spring wheat futures rose 5 1/4 cents to $7.03 1/2 and gained 51 cents on the week.
5-day outlook: The wheat market bulls had a very good week this week, including technically bullish weekly high closes. That sets the stage for follow-through technical buying next week. However, SRW and HRW futures markets are short-term overdone on the upside and due for routine corrective pullbacks that could well occur next week. Solid gains in the U.S. dollar index today, if extended next week, could also limit buying interest in the wheat futures markets.
30-day outlook: Wheat traders and producers will continue to keep a close eye on weather patterns in wheat country in the coming weeks. World Weather Inc. today said North America weather “continues to cycle through a repeating weather pattern and that may culminate in the return of colder than usual temperatures for a few days late next week and into the following weekend. Frost and freezes may accompany the cool off for the northern Plains and Midwest, although the colder conditions do not look very threatening to crops at this point in time.” Wheat is not far enough along in the Midwest or northern Plains to be permanently damaged by cold weather and there is not much spring crop that has been planted and is up enough to be seriously harmed if it does get cold, said the forecaster. “Nonetheless, the event will be worth watching just simply from a cyclical perspective. More stormy weather like that of this weekend may occur again May 9-10 with one more surge of cold weather expected May 10-12.”
90-day outlook: Spring wheat futures have lagged price gains in winter wheat markets. Such likely reflects more favorable weather over the Northern Plains, as well as expected increases in spring wheat and durum plantings. Look for the winter and spring wheat futures markets to continue to pay close attention to the corn futures market in the coming weeks. Sustained price strength in wheat likely won’t occur unless the corn market rallies, too.
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