Wheat prices are struggling to sustain a move higher on both sides of the ocean. The attached chart points to weak technical signals on the continuous active monthly Paris milling wheat market on the Euronext market. After reaching a double-bottom of EUR 149 in February and April of 2016, the monthly chart shows a move to the 23.6% retracement of the move from the November 2012 high to the low reached in February 2016, which was met with resistance in June 2016.
A second rally on the monthly chart began in October 2016, which ended with a high this month, once again falling just short of testing this resistance. The March monthly trading bar shows a bearish outside-month reversal, trading both higher and lower than the February trading bar, while pointing to a close near the lower-end of the month's trading range, barring a sharp move higher in Friday's trade.
Thursday's release of the International Grains Council's March Grain Market Report continues to point to the possibility of continued well-supplied grain markets over the upcoming crop year. While global wheat production is estimated 19 million metric tons, or 2.5% below the record realized in the current crop year at 735 mmt for 2017/18, the first year-over-year drop in five years, ending stocks are expected to fall a modest 5 mmt, or 2%, to 234 mmt. This would still be the second-largest carryout ever, due to the large carry-in from the current crop year, with the global stocks as a percent of use falling only slightly to a burdensome 31.6% in 2017/18.
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