Tuesday's spring wheat markets failed to match the move seen in winter wheat prices, although the new-crop spring wheat markets may have signaled some positive technical signals this session.
As seen on the attached chart, the December spring wheat future ended 3 1/2 cents higher on Tuesday, finishing near the middle of the session's trading range. This session's low fell just short of a test of the contract's April 24 low of $6.12 1/4, while Tuesday's trading bar formed a bullish outside-day reversal, trading both higher and lower than Monday's trading range while ending the session higher.
As seen on the chart, the $6.21 per bushel (bu) level is the 67% retracement of the move from the contract's April low to May 29 high, which has moved from chart support to chart resistance, preventing an upside move in each of the past seven sessions, with most daily closes over this period near the lower end of the session's trading range.
The middle study shows the Dec/March spread or carry narrowing this session to minus 14 1/2 cents, a bearish level of carry, but did show signs of supportive commercial activity for only the second time in 11 sessions.
Should a further move higher not materialize, support at $6.12 1/4/bu will be key; a breach of this level could see a full retracement back to the April 2/4 low of $6.01 1/4/bu as well as psychological support at $6/bu. As seen on the lower study of the attached chart, prices are deeply oversold, which may discourage noncommercial selling and help maintain price in the range traded for more than two months.
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