Canada Markets

Spring Wheat Futures Break Long-Term Support

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
Connect with Cliff:
@CliffJamieson
The red spring continuous monthly chart indicates a break of support at the 67% retracement of the move from the $4.77/bushel double bottom in September/October 2010 to the high of $11.20/ per metric tonne reached in May 2011 which is at $6.89 1/4/bu. in last week's trade. Monthly stochastic indicators are oversold although continue to trend lower. This is the lowest price level seen since July 2010. (DTN graphic by Scott R Kemper)
The red spring continuous monthly chart indicates a break of support at the 67% retracement of the move from the $4.77/bushel double bottom in September/October 2010 to the high of $11.20/ per metric tonne reached in May 2011 which is at $6.89 1/4/bu. in last week's trade. Monthly stochastic indicators are oversold although continue to trend lower. This is the lowest price level seen since July 2010. (DTN graphic by Scott R Kemper)

Last Thursday's 8 1/4-cent move lower on the March contract saw long-term support broken at $6.89 1/4 per bushel, a level which represents the 67% retracement of the rally from a $4.77/bushel double bottom seen in September/October 2010 to the high of $11.20per metric tonne achieved in May 2011.

The attached monthly continuous chart indicates that both September and November lows came close to a test of this support after reaching lows of $6.97 1/4/bu. and $6.95/bu., respectively. Current price levels take us to prices not seen since July 2010.

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The monthly chart would indicate no chart-based support, with the next monthly low at $5.11 1/4/bu. Potential support seen on the continuous weekly chart (not shown) is staggered from $6.16 1/4 down to $5.03 1/2/bu.

Stochastic momentum indicators on the continuous monthly chart are trending lower in over-sold territory although showing no sign of turning higher.

The continuous HRS/HRW wheat spread (not shown) is pointing to a close of minus 19.25 cents (HRW priced over HRS) due to the relative demand for the two classes because of huge supplies of spring wheat and the overall lower protein of the North American crop. This is the weakest spread since reaching minus 20 3/4 cents in August 2010.

Cliff Jamieson can be reached at cliff.jamieson@telventdtn.com

(ES)

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The red spring continuous monthly chart indicates a break of support at the 67% retracement of the move from the $4.77/bushel double bottom in September/October 2010 to the high of $11.20/ per metric tonne reached in May 2011 which is at $6.89 1/4/bu. in last week's trade. Monthly stochastic indicators are oversold although continue to trend lower. This is the lowest price level seen since July 2010. (DTN graphic by Scott R Kemper) 
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