Headlines:
- Presidents’ Day: Monday, February 20th, Energy markets are open until noon and will resume trading at 5:00 pm CDT. Grain markets are closed Sunday night and Monday day. They will reopen Monday at 7:00 pm CT.
- Wheat futures make short-lived rally
Chicago wheat futures made a short-lived attempt to break out of a long-term downtrend channel, which has held in place for five years. But prices turned sharply lower, as a wave of selling developed, pushing prices back below the 200-day moving average. “After a slow start this morning, things got a bit more interesting in the afternoon on solid US wheat export sales and a new round of fund buying,” said CRM AgriCommdoities. US weekly wheat export sales for delivery in 2016-17 were reported at 569,100 tonnes, ahead of the estimated range of 300,000 to 500,000 tonnes.
Summary:
The US Dollar sell-off that we signaled yesterday was right on point. The US currency fell hard today after a significant reversal day yesterday. The seller’s bar that posted today suggests that move to about 98 in the coming weeks could very well be at hand. The next near-term level of support is at 100.16. If it breaches and closes below that level tomorrow, we like our chances of reaching 98. We also pointed out in yesterday’s chart that the greenback had reached an overbought condition which was a warning for potential weakness.
Despite the weakness in the US Dollar today, the grains were the victim of heavy selling and profit taking today. Once again, producers took to selling and locking in gains at key resistance levels. Our red and green trendlines show sound resistance for July Beans. We are looking for Beans to move down and test the lower red trend line. Upon breaking 1054, we expect to see prices gain downside momentum.
Our minimum price objective for July Wheat was 487. It made a high of 488.75 today then it got steamrolled for the balance of the day. The next key operating levels for this contract are 499.50 and 465. Corn was also under pressure today giving up 5.50 cents.
After a strong start for the week, we enter the long weekend on a bit of a sour tone. November Beans gave up 17.50 cents and Wheat surrendered 8.50 cents.
