Jan. 16 (Bloomberg) -- Wheat may rise to a four-week high in Chicago after closing above the 20-day moving average, according to technical analysis by Starsupply Commodity Brokers.
The grain for delivery in March may climb as high as $8.10 a bushel on the Chicago Board of Trade in the next two or three weeks after settling above the 20-day measure, currently at about $7.71, Arnaud Saulais, a broker at Starsupply, said by phone yesterday from Nyon, Switzerland. A price of $8.10 would be the highest for a most-active contract since Dec. 19.
“In the very short term it could be quite bullish,” Saulais said. “We know that we have to be careful on the long term because the weather could change.”
Wheat futures in Chicago are 30 percent higher than at this time last year after drought cut U.S. corn and soybean output in 2012 while persistent dry weather threatens to hurt winter wheat in the Great Plains before the next harvest. Prices slid 9.9 percent in December, outpacing the 7.7 percent drop on NYSE Liffe in Paris, as traders speculated that record corn and soybean crops in South America will ease tight supplies. All three crops can be used in livestock feed and biofuels.
Recent declines have made U.S. wheat more competitive for importers, and the extra demand may support prices, Saulais said. Egypt, the world’s largest wheat importer, agreed to buy U.S. grain in its last three state tenders, after favoring French supplies since September. Chicago futures were more than $1.44 a bushel cheaper than the Paris contract on Jan. 10, the biggest discount ever for the two contracts.
Milling wheat for March delivery topped the 20-day moving average in Paris. After closing above resistance at about 249.26 euros ($330.89) a ton, prices may climb as high as 255 euros, Saulais said.
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