European milling wheat is far closer to the situation faced in the Black Sea region, while as recent as Tuesday, there were expectations that wheat from France could be competitive in this week's Egyptian tender.
The nearby September contract closed EUR 6.75 per metric ton (mt) higher at EUR 356.75/mt, meeting resistance at Monday's high while holding above the contract's 100-day moving average for a fourth session. In addition, trade is holding above the 50% retracement of the move from the 2022 low reached in January to the 2022 high reached in May at EUR 342.75/mt.
The first study shows the Sept/Dec futures spread, which strengthened by EUR 1.75/mt on Tuesday to close at EUR 8.25/mt, the strongest spread seen since the same level was reached on May 4. Over the past five years, this spread has averaged minus EUR 3.25/mt on this date (December above the September), while has never been inverted on this date in the past.
As seen on the lower study, the stochastic momentum indicators are in oversold territory but potentially close to crossing, which could trigger a change in tend, with confirmation from a four-day high or a move above EUR 366.50/mt.
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