Wheat Futures Respond to Much Need Rain

After a huge reversal to the upside on Friday, wheat futures has backed-off the highs for a second day.  The current wheat futures outlook is two-fold: recent rain in the US , Russia, and Ukraine have favorable for crop conditions, and investors are not betting on central banking stimulus.

Specifically, the winter wheat growing areas in the US Great Plains have had over 1″ of rain recently, and another inch of rain is predicted over the next week.  Then it was learned in the March 13th fed meeting’s minutes they will refrain from printing more money unless certain conditions happen.

Chris Hildebrand, vice-president of trading at HighGround Trading Group in Chicago, stated today in an e-mail interview regarding the current wheat futures situation, “The weather has been very favorable for the winter wheat crops this week and should give them some much needed moisture.  The outside forces on the market though may keep wheat prices pinned in the current range to slightly lower. We are really getting a lot of  “risk off” trading across all commodities except for the USD coming into the long weekend which could help drive price a bit lower from here.”

The trend for wheat futures is technically down, but has been trading more sideways since the beginning of the year.  I will continue to look for lower risk trades in the direction of the trend, and at opportune times

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