It took a month for the May spring wheat contract to reach its 2017 low of $5.28 per bushel after reaching its 2017 high of $5.73 1/2, although there have been some positive technical signs since. The $5.28/bu low reached on Tuesday of this week was the lowest point reached since the Dec. 28/29 double-bottom on the daily chart of $5.27 3/4/bu, while a positive sign on Tuesday was a doji trading bar (the day's open equal to the day's close), a positive signal given the close near the upper-end of the day's trading range.
Gains in the old-crop contract totaled 8 cents on Wednesday and 7 1/2 cents on Thursday, moving back above the contract's 200-day moving average while breaching the 38.2% retracement of the move from the February high to the March low, measured at $5.45 1/4/bu. Thursday's move resulted in the highest move seen in eight sessions, clearing the path for a move into an uptrend. Further resistance lies at $5.50/bu, or the downward sloping blue trendline drawn from the March high, as well as $5.50 3/4/bu, the 50% retracement of the move from the February high to the March low.
Should gains extend into Friday's trade, a move above $5.51 3/4/bu or last week's high, along with a close near the upper-end of this week's trading range, would also signal a bullish, outside reversal bar on the weekly chart (not shown). The lower study points to supportive commercial buying this week, with the May/July futures spread reported at minus 5 1/4 cents, with chart resistance reported at minus 4 1/2 cents reached on March 1.
DTN's five-year seasonal index chart shows that the front-month spring wheat futures typically trend higher into early April, given the average move over the past five-years, although then typically drift lower into early June. Should spring wheat prices struggle at resistance going forward, this could be viewed as a signal to trigger additional old-crop sales.
DTN 360 Poll
Please watch for this week's poll on how you view the spring soil moisture conditions as we enter spring. You can weigh in with your thoughts on this week's poll, which is found at the lower right of your DTN Home Page. We thank you for your participation!
Cliff Jamieson can be reached at email@example.com
Follow Cliff Jamieson on Twitter @CliffJamieson
© Copyright 2017 DTN/The Progressive Farmer. All rights reserved.