Futures Roundup
Wheat to Stay Range-Bound?
Fundamentals
Wheat prices have been hurt by very large crop sizes in virtually every major producing country. In the US, the Spring Wheat crop in Kansas is 53% harvested, compared to the 20 year average of 4%. Despite the good progress in the US, there are still some who believe that the actual crop in the Russia, Australia and Europe will come in under expectations. India, who is the world's second largest producer of Wheat, is in its sixth consecutive year of record crops. However, this is a mixed blessing for farmers, as there is insufficient storage for the grain, and the country risks losing 6 million metric tons to spoilage.
Technical Notes
Turning to the chart, we see the July Wheat contract trading in the middle of the 575-675 trading range the market has found itself in for the past nine months. It is interesting to note that momentum has moved lower, even as prices have remained steady. The RSI indicator is near oversold levels, which could support prices in the near-term.
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About Mike Zarembski
Born in the grain pits of the Mid-America Commodity Exchange (MidAm) in the early 1990s, Mike's futures career soon shifted to the offices of TD Waterhouse in 1999, followed by Xpresstrade in 2002 and eventually optionsXpress in 2007.
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