Weekly Market Analysis: Second Week of Higher Wheat Prices

For the second week in a row, the wheat price traveled to a higher ground. The range for the July Kansas City wheat contract during the two week period is $1.23 ¼ cents. The wheat charts show a bullish pattern but indicators are starting to reach the top of the graph. In addition, the price seems to have stalled out during the last three days of this week. The wheat market needs to see a new high for the move on Monday to continue the bullish momentum.

Some of the market moving news for this week includes the dry concern found in many locations around the world. Here in the United States, the Midwest is experiencing extremely high temperatures and dry conditions. These conditions have remain for a longer than normal amount of time without any relief. The forecast calls for more of the same. This affects the corn production more than the wheat but these two markets are running together with their price action. In Russia, a small amount of moisture relief recorded this week but their forecast returns to hot and dry. Grain analysts in this country are lowering their wheat production estimate. The India monsoon season is off to a slow start. Moisture for this country is running 23% below normal. Add China, especially their northern plains, to the list of wheat crops that are under major stress.

Positive financial news came to the commodity markets on Friday. News out of the European Summit indicates a change in the method of bailing out banks in their countries that are in a financial crisis. This sent the United States dollar sharply lower. In addition, the stock market, energy markets and the metal markets posted solid gains. It is good for commodities to see the investment crowd returning.