Minneapolis wheat futures did not perform well this week, closing near the bottom of its weekly trading range, losing 26 3/4 cents loss during the week, for a 3.1% loss. This compares to corn futures, which suffered a 2% loss and soybeans at a 3.6% loss.
The monthly chart is a reminder of the four months that went by, from August through November, where prices found solid support in the $9.16 1/2 to the $9.21/bu. level, which was also in and around the contract's 38.2% retracement of its May-through-July rally.
The challenge is to find the next level of support, as the monthly chart indicates the March contract's plunge through the 38.2% retracement level, its 50% retracement at $8.89 1/2 and also its 61.8% retracement level at $8.55/bu.
Support may have been found today at the contract's two thirds or 66.7% retracement level, which is shown by the horizontal blue line. While trade did take place a few cents below, it did come back in the last hour of trade to close above this level, if only by a 1/2 cent ($8.41 close, as compared to the $8.40 1/2 support level).
The more active Chicago wheat futures breached this same support level, at $7.50/bu., while also trimming its losses at the close, but failed to climb back above support, closing at $7.47 1/4/bu.
Should the HRS contract not be able to find further support at the current level, the next weekly low is a further 36.5 cents lower at $8.04/bu., a weekly low from late June (not shown). The monthly chart indicates stochastic momentum indicators (bottom study) trending lower, while the weekly indicators are trending sideways in deep, over-sold territory with no indication of recovery.
Cliff Jamieson can be reached at firstname.lastname@example.org
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