Canada Markets

Weekly HRS Chart Flashes Positive Technical Signals

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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May MGEX spring wheat futures gained 7 cents this week, the largest weekly gain seen since December after reaching the lowest level traded in eight months earlier in the week at $6.08/bushel. This week's move saw price reach the highest point in seven weeks while forming a bullish outside-week reversal signal. The middle study points to supportive commercial buying this week, while the lower study points to a potential move into an uptrend as indicated by the stochastic momentum indicators on the weekly Chart. (DTN graphic by ProphetX)

While spring wheat futures have struggled to follow the recent moves seen in the winter wheat markets, the weekly MGEX spring wheat chart has flashed some positive technical signals this week.

After reaching the May contract's lowest point in eight months this week at $6.08/bushel, double-digit moves higher on Wednesday and Thursday followed by profit-taking on Friday has led to a 7-ent gain over the week, the largest weekly gain in eight weeks. This week's trade formed a bullish outside-week reversal bar on the May chart, trading both higher and lower than the range seen in the week prior and confirmed by Friday's higher weekly close.

In addition, the Feb. 26 weekly high of $6.36/bu. reached the highest level trading in seven weeks, with a four-week high being a technical sign of a potential change in trend.

The middle-study points to supportive commercial buying interest over the week, with the brown line showing the May/July spread narrowing by 2 1/4 cents over the week to minus 7 1/2 cents. While not shown, CFTC data as of Feb. 27 shows investors or noncommercial traders paring their bullish net-short position for the second straight week to 897 contracts, the smallest net-short held in three weeks.

The lower-study points to bullish crossover stochastic momentum indicators on the weekly chart while in oversold territory, also signaling what could be a move into an uptrend on the weekly chart.

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Cliff Jamieson can be reached at cliff.jamieson@dtn.com

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