Price action: March SRW wheat rose 14 cents to $5.29 1/2, near the session high, hit a five-week high and for the week up 11 1/2 cents. March HRW wheat gained 15 cents to $5.40 3/4, near the daily high, closed at a two-month high close and on the week up 13 1/2 cents. March spring wheat futures rose 1 1/4 cents to $5.75, nearer the session high and for the week up 10 cents.
5-day outlook: The winter wheat futures markets were in solid rally mode today, on short covering and perceived bargain hunting. The markets were also supported by USDA reporting weekly U.S. wheat sales of 618,100 MT for the week ended Jan. 15, which were up noticeably from the previous week and four-week average. Net sales topped the pre-report range of 150,000 to 450,000 MT. Today’s technically bullish weekly high closes in winter wheat futures markets will also invite the chart-based specs to play the long sides early next week. Wheat traders are also watching a major winter storm in the Plains states that has the potential to produce some winterkill.
30-day outlook: World Weather Inc. today said a close watch on U.S. temperatures and snowfall this week is warranted. Bitter cold this morning have raised a little concern for wheat in Illinois and parts of east-central and north-central Montana where no snow was on the ground. Nebraska received snow overnight to protect its wheat crop and temperatures in Kansas were not low enough to be an issue. Snow is expected in many areas from the central Plains into the Midwest this weekend to protect winter crops from damage. North-central into eastern Montana and a few pockets in the western Dakotas may not have sufficient snow cover and some damage is possible. The losses are unlikely to be very great, though. Meantime, bitter cold in western Russia and northeastern Europe recent has had no negative impact on winter crops because of significant snow cover and no changes in the situation are warranted for the coming week to ten days. Warming is likely next week. Drought in the Middle East, Morocco and Northwestern Algeria has been eased and will continue to be eased. Tunisia dryness has also been eased recently with more moisture coming. France has seen some improved topsoil moisture as well and more precipitation is needed to end long term drought. Some of that moisture will be coming in the next week to 10 days.
90-day outlook: Recent weakness in the U.S. dollar index that today was poised to close at its lowest level since early October is a bullish element for the wheat futures markets. In hard red spring wheat, short-covering gains from the Jan. 16 low led nearby futures above key technical areas, though the upside is likely to be capped by resistance at the Dec. 24 high. A sideways to lower pattern seems likely, though the three-month-long pattern of consolidation could be a basing pattern and ultimately a longer term floor if an upside breakout were to occur
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