Market Analysis: Wheat Price is Dropping
Disappointment describes the feelings for bullish traders and wheat producers at the end of this week of trading. Until Thursday, the wheat price held major support found on the charts. The price action the last two days of this week leaves one to believe that the seasonal down trend in the wheat price has just began.
This week’s negative developments included a 21 ½ cents loss for the week in the July Kansas City wheat contract. The price settled below the last reaction low. The price dropped below the 50-day moving average. The lines on the 50-day moving average show a slow decline. The lines on the trend indicator crossed and now point down. On Friday, the wheat market separated itself from the corn market as the July corn contract posted double-digit gains while the wheat price sold off. The list of this week’s action illustrates the bearish attitude that has attack the wheat market.
Wheat harvest is fast approaching in the Plains States. In the western region, insurance adjusters have/are making their rounds. It feels like the wheat market has factored in the loss in bushels. Maybe the market underestimated the amount but that will be determined later (harvest).
The next paragraph was in last week’s comments. Last week’s fear is this week’s reality. Action is important by producers who have a good chance at harvesting a wheat crop. As a famous comedian says “Get Er Done”.
Leffler Commodities, LLC
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Augusta, KS 67010
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PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
SEASONAL TENDENCIES ARE A COMPOSITE OF SOME OF THE MOST CONSISTENT COMMODITY FUTURES SEASONALS THAT HAVE OCCURRED IN THE PAST SEVERAL YEARS. EVEN IF A SEASONAL TENDENCY OCCURS IN THE FUTURE, IT MAY NOT RESULT IN A PROFITABLE TRANSACTION AS FEES AND THE TIMING OF THE ENTRY AND LIQUIDATION MAYAFFECT THE RESULTS.