The December spring wheat contract ended 14 1/4 cents higher on Tuesday for its largest daily gain seen since Aug. 31 to reach a three-week high. Today's close ended at $5.91 1/2/bushel, just under resistance at $5.92/bu., the 33% retracement of the move from the contract's Aug. 7 high to Sept. 13 low.
Various levels of technical resistance lie in the immediate area, which ends with a test of psychological resistance at $6/bu. This includes 1) the contract's 100-day moving average at $5.95 1/2/bu., the 38.2% retracement of the move from the discussed downtrend at $5.97/bu. as well as the contract's 50-day moving average at $5.97 1/4/bu.
As seen in the first study below the price chart, the December/March spread has narrowed 2 cents so far this week to minus 12 3/4 cents. This points to supportive commercial buying interest taking place, with this spread the narrowest seen since Aug. 9. When compared to the winter wheat contract, the similar spread in the HRW market is unchanged so far this week while this spread in the SRW market has weakened 3/4 cents so far this week.
At the same time, the histogram in the lower-study points to the net-futures position held by noncommercial traders. While this group has had trouble finding direction over the past eight weeks, they are now modestly net-short futures as of Sept. 25 at 3,392 contracts. This can act as a continued bullish factor should this group cover shorts in order trade from the long side.
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