Fundamentally, prices in the wheat market could be impacted by Egypt's new requirements.
Egypt, the world's number one purchaser of wheat, has imposed some requirements on the wheat they will buy. It must be completely absent of ergot. Ergot is a fungus that produces alkaloids that can cause ergotism in humans and mammals. From what I can tell it's one nasty disease that can cause major anxiety, vertigo, and psychosis. Physically, it can cause gangrene.
Since Egyptians consume a lot of bread, I can certainly understand why they would not want to mess around with this disease. Although, if these requirements cause an issue with supply coming into the country, we could see a different sort of problem in Egypt. In the past there have been riots and major social unrest as a result of price increases in bread.
Personally, I would rather run the risk of riots and social unrest than face on outbreak of ergotism. In the end, the impact that this will have on prices remains to be seen.
Technically, my support area in CBOT Wheat has held to my satisfaction. My major support area in this market was at about $4.60/bushel. I have added my favorite technical indicators to the chart below. I have coined them the "10/20/50/BB Trend Finder."
They are the 10 (red line), 20 (green line), and the 50 (blue line) day Simple Moving Averages or SMAs. I have also added Bollinger Bands or BBs (light blue shaded area) and Candlesticks (the red and green bars with the candle stick wicks, and on this daily chart each bar represents one day of trading).
In addition to were support is, these indicators on the daily chart tell me that the CBOT Wheat is in an upward trend and poised to make a big move higher. This is fairly easy to determine as 3 out of 5 of the indicators in my "10/20/50/BB Trend-Finder" are pointing up and the market is trading above the 10 and 20 SMAs.