December Wheat Gaps Higher Supporting the Bulls

October 24, 2017 1:38PM CDT

Chicago December wheat is down 2.5 as of Tuesday morning, but opened higher than yesterday at 437’6. Kansas City December wheat is down 2.25 cents, while Minneapolis December wheat is down 1 cent, and MATIF December futures unchanged. Outside market forced are mixed. Total September wheat imports were seen at 443,680 tonnes up 1.7% from last September. China sold 70,418 tonnes out of 2.0 million tonnes offered at auction today. The auction will continue through Thursday. The Chicago wheat market saw short covering from speculative funds as the managed money trader category increased their net short positions by 9,963 contracts to 77,692 contracts as of October 17. With open interest in Chicago up nearly 30,000 contracts since October 17, the managed money trader’s net short could be closer to 100,000 contracts.

From a purely technical outlook, a bullish signal was given with an upside crossover of the daily stochastics. Daily stochastics are showing positive momentum from oversold levels, which should reinforce a move higher if near term resistance is taken out. Market positioning is positive with the close over the first swing of resistance with a near-term upside target at 448.25 and next area of resistance around 444. 


Dec '17 Wheat Daily Chart

Dec '17 Wheat Daily Chart

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgement at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.