July 30, 2010

French wheat futures surge higher, US follows

France's milling wheat futures continue to climb higher as US wheat futures continue to run after them.
 

On Wednesday, the September Kansas City wheat moved through the US$6.25 resistance and reached the highest level since last August. The next major upside objective for the September KW is the US$6.60 area.

The reason that US wheat futures are moving higher with the European markets is the idea that eventually there will be a better export market. 

The corn weather scare is over, but the corn has been well supported by the wheat and by the rising European corn and feed wheat futures. A good yield is expected in the US, but problems with the wheat in Europe and the Black Sea region mean that there will be less competition on the world market from the European feed wheat. 

The December corn has held support at the 50% retracement of the last move up. 

If this is the beginning of another leg higher, technical traders will be looking for the December corn to move up to US$4.81.