The December spring wheat future closed 4 1/4 cents lower on Tuesday, at $8.56/bushel, its first lower close in three sessions, while consolidating within the previous session's range in sideways trade.
Since early April, the December contract has reached lower highs, while since early May, the contract has also reached higher lows as price action points to a consolidation chart pattern.
On June 16, the December breached the resistance of the contract's 100-day moving average, while despite trading both sides of this level today, held above the support of the 100-day at $8.54 1/4 per bushel (bu). For a second session, the December is struggling with the resistance of the 61.8% retracement of the move from the April 3 high of $9.10/bu to the May 3 low of $7.80 1/2/bu, calculated at $8.60 1/2/bu. A sustained move above this level could allow for a continued move higher.
Upside resistance is seen at the downward-sloping blue line drawn from the April 3 high, calculated at $8.75 3/4/bu.
The brown line on the second study shows the Dec/March futures spread, which weakened slightly to minus 4 3/4 cents today. This compares to minus 6 1/4 cents one year ago while the five-year average for this date is minus 8.65 cents.
The blue bars on the lower study of the chart shows lower study shows noncommercial traders holding a bearish net-short position for a seventh consecutive week for the week of June 13, while paring the size of this position by 1,106 contracts over the most recent week, the first time this position has been pared in four weeks. The bearish position held over the most recent week remains close to the largest bearish position held since September 2020.
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