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KCBT Wheat Futures Market Analysis

Free in-depth market analysis on the KCBT Wheat futures market written by a professional Wheat futures trader.

November 11, 2012

Wheat Futures Broker, Van Commodities, Inc.

Kansas City Wheat, basis the December contract (KEZ12) has traded in a $.88 range for seventeen weeks, with $9.57 capping the upside and the contract finding support at $8.69. Several global concerns about the quality and export potential from several major crop exporters and low soil moisture in the US Hard Red Winter Wheat areas have supported the price of KEZ12.

US wheat prices, leading up to Friday’s USDA Crop report traded to the top end of their range. Ideas that US wheat was slowly becoming more competitive on International Markets, because of supply constraints in Eastern Europe (Russia, Ukraine) and potentially Argentina and Australia-due to damaging weather, were quickly pushed to the back burner after the Government data.

The wheat complex was undermined Friday, November 09, 2012 by the increase of both US and Global carryout levels in the USDA Supply/Demand report. US carryout was increased by 50 million bushels and Global carryout was increased by one million tons. Analysts on the average were expecting Global Carryout to be reduced by 2.5 million tons, roughly.

Weather in the Plains will be closely monitored for rain events and whether soil moisture levels get better, improving conditions for winter wheat. Expectations for the quality of the Hard Red Winter Wheat crop going into dormancy should be a factor in the direction KEZ12 trades when it breaks out of its $.88 trading range. 

The outside day down reversal for KEZ12 was technically damaging. Several momentum studies were signaling an overbought market, on a short term basis and some intermediate term indicators were already trending down. KEZ12 is still trading in its flag configuration and the odds are still that when KEZ12 breaks out it will be to the upside.     Initial resistance is 928.00-937.00 and then 946.00-9.52.

March 20, 2012

Commodity Trader, Van Commodities, Inc.

Grain markets were down across the board for a second day, along with most other commodity markets on Tuesday. A lack of reported export orders in the grain markets and mervousness over the potential for further Chinese economic slowing may have added to falling commodities.

On the Kasas City Board of Trade (KCBT) May hard red winter wheat futures (KEK12) lost 11 cents on the day and continued its sell off after the outside reversal day March 19, 2012. KEK12 has sold off 30 cents in the past two days and the charts display the potential for future loses over the intermediate term. The contract closed below most DMA of significance as well as below the neckline of a potential Head and Shoulders topping pattern. The contract may find some support around $6.75 but if that support fails KEK12 may be on its way to $6.45. Resistance comes in around $6.95-$7.00.