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Yesterday’s Close: May wheat futures finished yesterday’s session down 14 ¾ cents, trading in a range of 15 cents. Funds were estimated sellers of 7,500 contracts on the day.
Fundamentals: The market is desperate for some good news to help stop the bleeding, the bull camp is hopeful that tomorrow’s USDA report could be that catalyst. Estimates for U.S. carryout range from 1.010-1.050 billion bushels, the average being 1.020 billion bushels, a notch above the 1.010 we saw in February. Estimates for world carryout come in from 266.0-269.0mmt, the average also being little changed from last month’s report. Export sales this morning came in at 622,000 metric tons, above the top end of expectations.
Technicals: The lack of follow through yesterday from the previous day’s session was a big caution flag. The failure against our resistance pocket from 463 ¾-466 ½ led to a full day of selling in yesterday’s session. With prices in uncharted territory this morning, making new contract lows, it’s tough to say where the next support is. We think the market is overdone to the down side, but that does not mean we are aggressively buying here. We want to be bullish at these prices, but the chart does not warrant it, this is why we have kept our bias as neutral.
Resistance: 450**, 463 ¾-466 ½***
Support: 441 ½**, 430*
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