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.
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