Wheat's short term price trend is downward, analyst says

March wheat closed sharply lower on Wednesday, after an early rally above Tuesday's high.

This formed an outside day down on the charts, and during the session the market traded to its lowest level since January 18, 2022. Milling wheat futures in Europe fell 1.9%, as concerns that Russia would invade Ukraine has lessened.

A lack of supportive news for the wheat market, despite continued dry conditions for the U.S crop, helped pressure prices.

For the near term, there is improved moisture across parts of the winter Wheat Belt, with rain, snow, and ice across the Central Plains and southern Midwest. However, the six- to 10-day forecast shows above-normal temperatures and below-normal precipitation for much of the winter wheat belt. The eight- to 14-day models show below-normal precipitation for the Southern Plains and mostly normal temperatures.

Dryness during dormancy is normally not an issue, as March-April moisture is more important to the crop's health. But with the dry soils, a period of much-below-normal temperatures could cause damage from winterkill. The Central and Southern Plains have seen mostly normal to above normal temperatures this winter.

A sharply lower close in corn added to the negative tone yesterday, and a sharp break in the U.S. dollar and strength in the U.S. stock market failed to provide much support.

Market Ideas

It may take some threatening weather for one of the key world exporters to help the market find a short-term low. Resistance for March Chicago Wheat is at $7.54 and $7.70, with $7.41¼ and $7.35½ as the next support levels. July KC Wheat resistance is at $7.70¾ and $7.80, with $7.53 and $7.51¼ as support.

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