March wheat did not trade overnight; Globex will open at 9:30 AM central today. Outside market forces are mixed this morning with a weaker dollar but also a slightly lower stock market. There may be some guarded optimism towards the wheat market to start the week based on anticipation that fund rebalancing in the New Year that could entail heavy wheat buying. Black Sea producers have been strong competitors to US wheat, but Black Sea prices have improved over the past 2-3 weeks. Out ahead though, traders are concerned that large crops in Argentina and Australia will also provide strong competition for US exports. March wheat finished the session Friday just one tick higher after a choppy and two-sided trade. The market was called to open 1-2 cents higher, but talk of the overbought condition after the recent surge and a lack of much movement in the other grains held the market in a tight range. Continued talk of short-covering from speculators has helped support the market to six higher closes in a row, but open interest has actually moved higher in recent days, which provides a more solid technical basis for the rally. March KC wheat was up 7 cents into the mid-session Friday, which provided some support, but it closed up only 2 1/2. Exporters reported to the USDA that 120,000 tonnes of US hard red winter wheat was sold to Nigeria. Moroccan officials indicated a record high year-end grain stocks situation, which was seen as a negative factor. The Commitments of Traders reports as of December 20th showed non-commercial traders were net short 55,522 contracts, an increase of 1,025 contracts for the week. The selling trend is seen as a short-term negative force. Non-commercial and non-reportable traders combined held a net short position of 78,086 contracts, up 491 for the week. This is approaching the record net short of 82,964 contracts set on November 21st. Commodity index traders held a net long position of 185,649 contracts, down 1,327 for the week.
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