Wheat Tighter, But Will Prices Be Bogged Down?
?? Fundamentals
Wheat futures have been the quietest of the grain markets, with prices in the front month December contact deviating very little from the 900 area in recent months. Can prices heat up? That is a question many traders have been asking themselves lately.
Australia and Argentina, the southern hemisphere’s two largest growers, have been facing issues with their current crops. Winter Wheat here in the US has seen worsening conditions. The percentage of Winter Wheat rated good/excellent has fallen to 38%, which is down 1% from the 39% figure the week prior and 20% below the 10-year average of 58%.
Poor/very poor conditions also jumped 3% to 22%. The cash market, especially in the Black Sea region, has seen much tighter supplies. This indicates shipments out of Russia and the Ukraine have slowed to a trickle.
?? Technical Notes
Turning to the chart, we see the December Wheat contract has been trading in a sideways channel for months now, with a very slight descending angle. This gives some traders very little to work with technically, other than swing trading ranges. Likewise, the oscillators are giving neutral readings. Technical traders have been waiting for a breakout in either direction, which has not arrived, so they must continue waiting.
——————————————————————————————————–
Disclaimers
This article is provided for informational purposes only. No statement in this article should be construed as a recommendation to buy or sell a security or to provide investment advice. The content provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy and completeness. optionsXpress makes every effort to provide timely information to its recipients but cannot guarantee specific delivery times due to factors beyond our control.
Derivatives involve substantial risk and are not appropriate for all investors. Please read the “”Disclosure Statement for Futures and Options”” prior to investing in futures or options.
For investments using a straddle or strangle options strategy the potential loss is unlimited. Multi-leg option strategies are subject to multiple commissions. Profits may be eroded by the commission expended to open and close the positions and other risks apply.