Wheat has had a rough ride since the historic highs reached in March, and now is at levels that will test a "swing support" zone that has held several times in the past year.
In summarizing this past week's wheat action, Total Farm Marketing noted (www.totalfarmmarketi...modities-12-02-2022/)
Wheat Prices Lower for the Week
December CBOT wheat futures shed 10-1/2 cents this week to close at 803-1/4
December KCBOT wheat futures shed 9-1/4 cents this week to close at 934-1/4
December MGEX wheat futures added 5-3/4 cents this week to close at 951-1/2
Informa raised its estimate for the 2023 World wheat crop my 4.5 million tons on higher production in China and India
Wheat export sales were only 5.7 million bushels last week which is the second smallest weekly total for that date since 1996
Managed money is currently holding its largest net-short position in 3 years
US winter wheat conditions improved somewhat after last week’s rains, but the Plains are still in an extreme drought and will need higher than normal winter precipitation to replenish soil moisture before crops come out of dormancy in the spring
Given the mostly negative news, the price action is understandable. But from here, what's the play?
Carley Garner from DeCarley Trading tweeted the following idea (and shared with her clients): madmimi.com/s/cbd7251
The link will take you to Carley's specific trade idea which...spoiler alert....plays on Wheat holding support and bouncing from here at some point.
I think her trade idea is well constructed and founded on sound reasoning. I actually initiated a small position in the call spread (without selling the otm put).
As always, my positioning and my article is NOT meant to be advice in any way! But it's good food for thought and discussion. Eager to hear reactions/thoughts.
In summarizing this past week's wheat action, Total Farm Marketing noted (www.totalfarmmarketi...modities-12-02-2022/)
Wheat Prices Lower for the Week
December CBOT wheat futures shed 10-1/2 cents this week to close at 803-1/4
December KCBOT wheat futures shed 9-1/4 cents this week to close at 934-1/4
December MGEX wheat futures added 5-3/4 cents this week to close at 951-1/2
Informa raised its estimate for the 2023 World wheat crop my 4.5 million tons on higher production in China and India
Wheat export sales were only 5.7 million bushels last week which is the second smallest weekly total for that date since 1996
Managed money is currently holding its largest net-short position in 3 years
US winter wheat conditions improved somewhat after last week’s rains, but the Plains are still in an extreme drought and will need higher than normal winter precipitation to replenish soil moisture before crops come out of dormancy in the spring
Given the mostly negative news, the price action is understandable. But from here, what's the play?
Carley Garner from DeCarley Trading tweeted the following idea (and shared with her clients): madmimi.com/s/cbd7251
The link will take you to Carley's specific trade idea which...spoiler alert....plays on Wheat holding support and bouncing from here at some point.
I think her trade idea is well constructed and founded on sound reasoning. I actually initiated a small position in the call spread (without selling the otm put).
As always, my positioning and my article is NOT meant to be advice in any way! But it's good food for thought and discussion. Eager to hear reactions/thoughts.