Canada Markets

July Spring Wheat Reaches Fresh High

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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The July MGEX HRS contract reached a fresh contract high on April 19 of $6.77 3/4/bu, the highest trade seen since Aug. 2017 while testing the 50% retracement of the move from the July 2017 high to September 2019 low on the continuous active chart. The lower study shows the noncommercial net-long position growing larger for the first time in five weeks as of April 13. (DTN ProphetX chart)

July hard red spring (HRS) wheat closed 1/4 cent higher at $6.71 1/2 per bushel (bu) on April 19, reaching a fresh contract high of $6.77 3/4/bu, closing higher for the fourth time in five sessions and the ninth time in 11 sessions.

Selling interest was limited this session in the July contract, with a fresh contract high reached despite the lowest trade volume reported in nine sessions at 3,024 contracts.

As seen on the attached chart, or the continuous active weekly spring wheat chart, today's July high moved above but failed to stay above the horizontal green line at $6.77 1/2, which is the 50% retracement of the move from the contract's July 2017 high of $8.68 1/2/bu and the September 2019 low of $4.86 1/2/bu. A sustained breach of this level could result in a potential continued move to the 61.8% retracement at $7.22 1/2/bu.

As seen in the lower study of this chart, the blue bars of the histogram represent the noncommercial net-long position held in HRS. The past week's data shows this net-long position increasing from 5,953 contracts to 11,081 contracts as of April 13, an 86% increase and the first increase in five weeks. This is the largest percentage increase seen for this contract since Oct. 19 as growing dryness experienced in the spring wheat growing area of North America.

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