WEEKLY WHEAT REVIEW: Wheat Market Tries to Hold Heat
Wedge formations could threaten a downside break.
Bryce Knorr
Published: Feb 2, 2009
The wheat market during the winter can have all the excitement of watching paint dry. But as spring approaches, nerves begins to ramp up — and this year's looking like an early spring, groundhog or not.
The typical pattern in the year after a bull market is for July futures to be very choppy into February, then break out to new highs in the spring on some type of weather concern before moving lower into harvest. July futures this year has held to that pattern, but charts in both Chicago and Kansas City are hinting at wedge formations that could threaten a downside break on weakness. A move like that now could flip the pattern into the seasonal of a normal, bearish year, making rallies much more difficult to pull off.
On the positive side, wheat has shown at least a little tendency to over-achieve recently, at times holding on to gains when corn and beans faltered. Just when some traders were ready to write off the market, following a poor weak of exports, the U.S. snared some of Egypt's latest snap tender, something that wasn't though possible due to all the competition on world markets. Still, end users remain very cautious.
To read Bryce Knorr's complete weekly wheat review, click HERE.
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