Hello Kansas Wheat. Wheat markets remain elevated but nervous. Old-crop wheat demand has been good, but exports need unsnarled logistics to maintain momentum. Landslides and derailments from major winter weather events in the PNW threaten to erase the good news we saw in this week’s WASDE update. Great Plains weather has been too warm and dry for comfort, although that can change in a hurry. And technically, our old friend, the 200-day moving average is in play, and this week will be important in that regard. Look at this KC July chart:

The 200-day moving average is the purple line. IF this week can close above the line (approximately above $4.73), then that will be a buy signal and all shorts should be bot in, and positions should be long.

IF THAT HAPPENS, it means don’t sell any more wheat. Some guys might buy in their existing sales.

This is still fairly risky territory. There are 2 previous examples on this chart when the futures moved back below the 200-day moving average, which brought in strong technical selling. This rally can still fail. But right now, I’d hold off on selling any more until the futures go back below the 200-day MA.

The solid blue line is the previous 11-week closing high, $4.73. We can see how powerful Friday’s move was. There is an old gap around $5.05-$5.06, which looks like a likely target to me.

The Day After Christmas bottom has held. The new trend is UP!

Click Here to Read the Rest of the Newsletter.

 

Source: Kansas Association of Wheat Growers