If that double bottom chart pattern in wheat, as discussed by Agrimoney 24 hours ago, is indeed to boost prices, well, its positive tendencies remained in disguise in early deals.
Not that the futures were trading heavily lower in early deals, shedding just 0.1% to $4.53 ½ a bushel in Chicago for December delivery, as of 09:40 UK time (03:40 Chicago time).
Signally, they remained – just - above their 10-day moving average, at $4.35 a bushel, offering some hope against a fresh wave of sales that headway in the last session encountered.
‘Still find plenty of sellers’
“The market did find a seam of selling at the day’s highs,” said Tobin Gorey at Commonwealth Bank of Australia.
“We expect the market to still find plenty of sellers when prices rise,” raising a threat to the idea of a double bottom in the chart indeed proving as bullish as some hope.
US broker Benson Quinn Commodities said that “I am inclined to believe these markets will stay rangebound and will move lower from the current levels.
“With the winter wheat’s trading near mid-range, the objectives are Tuesday’s high [$4.60 ¾ a bushel] on the upside and $4.20 a bushel on the downside.”
Winter wheat sowings
One intriguing factor is the rising open interest (ie live contracts) in wheat futures, close to a five-year high, despite what might appear limited prospects for price moves, with the high stocks a depressant to values, but with support from the fact that they are already historically soft.
Indeed, on the most positive aspect for prices, there are ideas of winter wheat sowings for the 2018 harvest falling in the US, expectations only boosted by the slow pace of seedings in Plains hard red winter wheat areas.
Terry Reilly at Futures International said that “there is little incentive for US producers to expand the winter wheat area given poor economics and price relationships” with sorghum and corn....MUCH MORE