| January 9 Dan Maltby Marketing Newsletter
Hello Kansas Wheat, and Happy New year.
The wheat market continued its bounce last week, so far…making me feel slightly better about my calling the close of the Christmas week as “The Bottom”.
The only thing we know for sure is…wheat is testing the upper limit of the roughly 40c trading range, nominally $4.00 to $4.40 ($4.06 to $4.39 on my weekly closing table, shown below), and before we go much further, let me stress that the $4.40 will be tough resistance to overcome:
I doubt wheat gets any help from soybeans, or corn, but beans especially are struggling. Notice this week’s bean close is red, as the close from 10/14 of $9.76 has rolled off this 11-week table, making the close of 11/11 the 11-week closing low, and this week tied it… There are still quite a few funds that are long beans, short wheat, and those funds are quite nervous.
This week (Jan 12) we are going to get some very big USDA reports…Wheat Seedings is what I will look at first. Then the Stocks-in-All-Positions, then the Final Crop Production, and then finally the January WASDE update.
Also…after this week, the Funds should be done with their rebalancing, and they will buy in some KC wheat. SO…we should get a good test of the $4.40 area. What that means to you is…if you need to sell some old-crop wheat, this week might be a good time. If you don’t have to sell, then…it is important to understand that NEW-CROP wheat, not old-crop wheat, will be the sole focus. And that means one thing…when we get the second rain in The Plains, the rally will collapse.
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Source: Kansas Association of Wheat Growers