Focus: The US Dollar and Wheat
During last week’s holiday shortened week, wheat continued to trade within a six-week range. There have not been any major news stories to push wheat out of its range. However, wet weather during Australia’s wheat harvest is recently reported to have downgraded up to 1 million tons of wheat to animal feed. Argentina‘s dry weather has resulted in a mixed crop yield. These outside factors may benefit U.S. farmers going forward. The uptrend in the U.S. Dollar has weakened, and price has entered a range. Any corrective weakness is the U.S. dollar will likely provide a boost to wheat prices. A lower dollar would increase the demand for exports because foreign countries would have increase buying power. If the dollar breaks out to the upside, further weakness in wheat can be expected.
Chart Courtesy of TradeStation
Dr. Charles B. Schaap transitioned from health care to wealth care in the nineties. He is the author of ADXcellence —Power Trend Strategies and Invest with Success—Big Profits for Small Investors. Dr. Schaap is a commodity futures strategist and recognized authority in technical analysis of the financial markets. His website is www.adxcellence.com.
