Wheat futures have resumed their rally after a day’s break with short-covering momentum returning to challenging their recent highs. July CBT Wheat futures are currently up .12 cents near their high of the day as of this writing at $5.23 per bushel at the Chicago Board of Trade.
US winter-wheat prices are up an average 9% from last week with the last of the bearish holdouts and renewed concern over the health of this year’s winter wheat crop. The USDA actually downgraded the the rating of our domestic winter-wheat crop from 45% (week before last), to 44% just recently.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, shared her view regarding the fundamental assessment of the wheat futures market by stating, “This year’s wheat (futures) prices seem to be marching to a different drummer by bucking the overall fundamental picture.” Levy adds, “The same group (the “USDA”) that downgraded the rating by 1% measly percent also upgraded spring-wheat by the same 1% but reported 91% of crop emergence – improving from 80%.”
Winter wheat futures trends are mixed at this time although the chart action appears to be similar. Taking a closer look…soft-red’s trend is down, while hard-red’s is up in my study of these markets. During times like this – when markets seem to disconnect – it is best to step aside until a clearer picture emerges.
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