Ukraine Tensions Draw Buyers to U.S. Wheat Futures

Today’s Spotlight Market
U.S. Wheat export sales for the week ending August 21 totaled 411,900 metric tons, which was towards the middle of analysts? expectations of between 300,000 and 500,000 metric tons. Wheat exports are running at 47% of USDA commitments vs. the average of 38% for this week in the marketing season.

 

Fundamentals
The escalation of military actions between Russia and Ukraine has once again raised concerns about whether grain importers can count on the black sea region in the coming months to obtain supplies. This fear has the potential to shift additional grain export business to the U.S., especially for Wheat and Corn, while the political turmoil continues.

All three U.S. Wheat futures classes were trading sharply higher on Thursday after reports that Russian forces seized a town inside the Ukraine border. While the current rally in Wheat prices seems to be more of a ?risk premium? being added rather than actual increased demand, the current short positions being held by large speculators, especially in the Chicago Soft Red Winter futures, may be the catalyst for further short-covered buying should hostilities escalate.???? ?

 

Technical Notes – View Today’s Chart
Looking at the daily chart for December Wheat futures we have what appears to be a rounded bottom formation with prices breaking out above the 20-day moving average on relatively high volume. We are seeing the 14-day RSI turn higher with a moderately strong reading of 56.22. We would need to see a close above resistance of 591.00 to add further confirmation that a potentially major bottom is in place. Support is seen at the recent low of 542.25 made back on July 29th.??

FridayAG29

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