Short covering was the name of the game in today’s March 2026 Chicago wheat futures market, hitting a new high for the week. This rally is promising for further strength in wheat, in my opinion. The rally is coming as dry weather increases concerns about crops in the United States Plains states. With the managed funds holding a net short position just under 100,000 contracts in Chicago wheat, further short covering is likely. I feel strongly that we will see higher wheat prices in the next 72 hours.
A trade strategy is to buy March 2026 Chicago wheat at 517.4 (today’s settlement was 518.5). Risk the trade to 507.4 stop, good till cancelled (GTC). This is a $500 risk. Profit objective is to sell March 2026 Chicago Wheat at 535.0 GTC. This is an attractive risk/reward ratio.
In my opinion, today’s chart for March 2026 Chicago Wheat (below) is about to change as wheat trades higher. The 200-day moving average is the red line and represents a goal for the future. This is an all-about-weather market with the managed funds short 100,000 contracts. More information is forthcoming in the United States Department of Agriculture’s World Agricultural Supply and Demand Demand report due on January 12.
March 2026 Chicago Wheat, January 7, 2026. Chart courtesy of CQG.
Stay tuned and contact me anytime at 1-312-878-2391 or sdavis@walshtrading.com for trade strategies.
Stephen Davis
Senior Market Strategist
Walsh Trading
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