The U.S. Department of Agriculture grain stocks report, released earlier today, estimated wheat stocks at 2.10 billion bushels, down 2% from a year ago. Wheat recently has performed stronger than the rest of the grain complex and today has rallied sharply on the USDA report, up 50¢. The DEC ‘12 wheat contract bounced off a key support level at $8.60, and now may travel to its upper end of its recent range (see chart). After such a powerful rally going into the summer, wheat has traded in a small range for the past two months. If for some reason wheat breaks down, there is strong support around $8.20, however, wheat is likely to test $9.20, and potentially test the yearly high from July just above $9.50.
