Commentary

Wheat saw a continuation rally that posted strong gains. Chicago wheat up 20 cents, KC up 19 cents. Minneapolis is up 10 cents. First, Indian government data shows wheat stocks at the beginning of April totaled 7.5 million metric tons, down from the 8.35 metric last year. The stockpiles are at their lowest level in 16 years as the government sold off record volumes to make up the short fall in production on lower yields the past couple years. World wheat stocks among the major exporters outside of the Black Sea Region and the United States are said to be tight, so a potential risk to those supplies could spark some short covering among fund managers. The market has seen these scares before, only to use the rallies as selling opportunities. Second, Crop conditions in the southern winter wheat belt are regressing especially in Kansas. Rain chances are fading. Crop conditions dropped 5 points on the week with number #1 Kansas dropping 7 points in the G/E category to 36 percent. Third, Russia struck grain storage facilities near Odessa with Ukraine targeting another Russian oil refinery.  No trade recommendations moving forward. Trade the charts. It seems there's some uncertainties in wheat that could prod further short covering. Technical levels for the remainder of week come in as follows. The market settled over key resistance at 583/84. That must hold as its now support. Should it not hold, 5.66 is next. A close under 5.66 and its last week's low at 542 and then 15% down for year at 5.35. Resistance is now at 597 and then 6.03, (50 week moving average). Closes above these levels and its 6.09 (trendline) and unchanged on the year at 6.28. Managed money as of last Tuesday in Chicago wheat has funds short 96K contracts. 

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