Since the USDA's bullish wheat data was released on Aug. 12, wheat markets have lost steam, in search of the next bullish nugget of news. Statistics Canada's Aug. 30 production estimates could be the confirmation that traders need, although the report may be cautiously accepted, since acres not harvested for whatever reason will not be included until the December report.
Since the Aug. 13 highs reached, December soft red winter wheat is down 61 cents or 7.8%, while December hard red winter wheat is down 54 cents or 7%. The December hard red spring wheat contract is down 29 1/2 cents or just 3%.
During the past seven sessions, the December HRS contract has seen daily closes land in a narrow 8 1/2-cent range. The daily close has also landed above the contract's 20-day moving average each session, despite trading both sides of this line during the past four sessions.
At the same time, daytime highs have reached $9.14 1/2/bushels (bu) in three of the past five sessions and $9.14/bu in a fourth session, signaling the challenge for this market to move higher.
While both daily and weekly stochastics for the December contract show sideways trade, some technical signs bears watching.
The lines on the first study show futures spreads weakening. The September/December spread weakened 2 3/4 cents on Wednesday to 17 1/4 cents (red line) and has weakened 3 cents for the December/March contract spread to a 12 cent inverse(brown line).
The blue histogram bars on the middle study show noncommercial traders increasing their bullish net-long position for three consecutive weeks, from 10,479 contracts as of July 27 to 18,235 contracts as of Aug. 17, an increase of 74%, while the largest bullish position seen in three months. This group may be getting nervous without a continued flow of supportive data.
Last of all is the volume chart, or the purple bars shown in the third study. Wednesday's daily volume was the highest seen this week, which accompanied the first daily loss of the week.
Cliff Jamieson can be reached at email@example.com
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