New-crop December spring wheat broke through support in Monday's trade, with the session's 7 1/4-cent loss to $6.15 1/4/bushel pushing price below the 67% retracement of the move from the April low to April high. One last price level that may prevent a further slide to the April low just above $6/bu. is found at $6.13/bu. to $6.13 3/4/bu., a bullish gap formed in trade from April 4 to April 5.
The middle study clearly shows the short-term trend continuing lower, while these stochastic momentum indicators would suggest that a continued move lower could occur prior to prices reaching over-sold territory below 20%.
New-crop spreads are growing increasingly bearish, with the blue line of the lower study representing the contract's September/December futures spread at minus 13 1/4 cents and the red line representing the Dec/March spread, while weakening to minus 12 3/4 cents, a sign of growing commercial bearishness. The Sept/Dec spread is testing chart support at minus 13 1/4 cents, while the further out Dec/March spread broke chart support this session.
Friday's CFTC data, as of April 17, shows speculative traders increasing their bullish net-long futures position by almost 100% to 5,720 contracts, the largest bullish position held since Nov. 28. While there may be second thoughts over this move, Monday's USDA Crop Progress data may be viewed as reassuring. As of April 22, 3% of the U.S. crop is estimated to be seeded, unchanged from the previous week. While progress in Idaho and Washington remains behind their average pace, no progress is noted for Minnesota (25%), Montana (24%) and North Dakota (13%), with the five-year average pace shown in brackets. South Dakota planting is estimated at 2% complete, as compared to the five-year average of 50%.
In advance of Statistics Canada's March Intentions report, pre-report estimates released by Commodity News Service points to wheat acres (excluding durum) to range from 15.7 million acres to 18.5 million acres, which compares to 17.346 million acres planted in 2017. Wheat acres (excluding durum) have fallen in Canada in each of the past four years, but at a declining rate. 2013 to 2014 resulted in a year-over-year drop of 1.679 million acres, 2014 to 2015 saw a drop of 1.2 million acres, a further drop of 700,000 acres were estimated from 2015 to 2016 and a further 335,000 acres from 2016 to 2017. A further drop in 2018 could be a supportive feature this week.
DTN 360 Poll
This week's poll asks how accurate you think Statistics Canada's April 27 planting intentions will be, given that the data is based on producer surveys conducted in late March. You can share your opinion on this poll, found on the lower-right side of your DTN Canada Home Page.
Cliff Jamieson can be reached at firstname.lastname@example.orgFollow Cliff Jamieson on Twitter @CliffJamieson
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