Canada Markets
MGEX Hard Red Spring Contract Finds Support in Friday Trade
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.
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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 cliff.jamieson@telventdtn.com
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