The wheat futures market has bounced off of a range high last week and moved lower since Feb. 6, as Chicago has trimmed 26 cents from the week-ago level of $6.70.

Soft White wheat bids were actually up more than a dime in the same week, with current bids around $7.08 per bushel delivered to Portland, a reflection of good demand from the Pacific Rim countries for white wheat. For Chicago, that puts us just about halfway back down in the range, within a nickel of the center of the 5-month range. Whenever a market that has been trading in a range as Chicago wheat has been doing since late September, the pressure to make a decision is lowest in the center.

The low end target is still 40- 50 cents lower, around $5.90 (mid-January low). Only a decisive break below this low would be enough to change the definition of the overall trend. The same goes for the upper edge around $6.75 in Chicago. For a moment, the wheat price has paused in a two-week-old decline, suggesting the buyers and sellers are about balanced while awaiting news. The March futures contract is about to reach delivery time, when the futures contracts become cash contracts to make delivery (if you hold a "short" sold position) or take delivery (if you hold a "long" bought contract).

Most traders never intend to hold any contract to delivery, but it is when the real world meets the futures world, as physical wheat ownership transfer according to futures contract rules actually takes place in elevators in Chicago or Toledo. The next nearby contract is May, which itself will reach delivery at the end of April.

The vast majority of wheat traders will shift their longer term positions into May futures well before First Notice Day on Feb. 29. Pacific Northwest white wheat has no associated futures contract, so prices are set in the light of the other wheat contracts in Chicago, Kansas City and Minneapolis, with a group of Columbia River/Portland based merchandisers setting the daily values according to their competitive needs. For the short term, there is little to do except observe the rhythm and tone of the market. It is still just a bit too early for spring weather to be a major factor in the Northern hemisphere.

Egypt did finally buy some U.S. wheat over the weekend, although it was only one vessel-load of 55,000 metric tonnes of Chicago wheat out of nearly 600,000 tonnes purchased, with 50 percent of the total from France and the rest from Argentina. That's nice to see but not inspiring. The U.S. Dollar has been showing some positive days amid its recent decline, which if it continues to rally will be a wheat price negative. The background is one of abundance of supply.

Gary Hofer can be reached at 509-337-8417 weekdays between 8 and 11 a.m. Pacific Time. The information and opinions contained herein comes from sources believed to be reliable, but are not guaranteed as to accuracy or completeness. The risk of loss in trading futures and/or options is substantial. Each investor must consider whether this is a suitable investment. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results.