Technically Speaking

Weekly Analysis: Wheat Markets

Source: DTN ProphetX

SRW Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $4.04 3/4, down 7 1/2 cents for the week. Last week's sell-off established a bearish crossover by weekly stochastics above the overbought level of 80%, indicating the secondary (intermediate-term) trend has turned down. If so support is pegged between $3.89 1/2 and $3.78 1/4, prices that mark the 33% and 50% retracement levels of the previous uptrend from $3.44 and the recent high weekly close of $4.12 1/4.

SRW Wheat (New-crop Futures): The Chicago July 2017 contract closed at $4.68 1/2, down 6 1/4 cents for the week. Despite the lower weekly close the secondary (intermediate-term) trend remains up. The contract continues to test resistance at $4.75 1/2, a price that marks the 33% retracement level of the previous downtrend from $5.86 1/2 through the low of $4.20. Weekly stochastics remain bullish but near the overbought level of 80%, indicating new buying interest could be limited.

HRW Wheat (Cash): The DTN National HRW Wheat Index (HW.X, national average cash price) closed at $3.65 3/4, down 3 3/4 cents for the week. The secondary (intermediate-term) uptrend looks to be nearing its end with weekly stochastics well above the overbought level of 80% and nearing a bearish crossover. The HW.X remains well below its next target of $4.07, the close the week of May 31, 2016.

HRW Wheat (New-crop Futures): The Kansas City July 2017 contract closed at $4.81, down 3 1/2 cents for the week. While the secondary (intermediate-term) trend remains up, the futures contract fell back from its test of resistance at $4.96 3/4. This price marks the 50% retracement level of the previous downtrend from $5.70 through the low of $4.23 1/2. Given weekly stochastics above the overbought level of 80% and bearish levels of carry in the July-to-September futures spread, continued buying interest could be difficult to generate.

HRS Wheat (Cash): The DTN HRS Wheat Index (SW.X, national average cash price) closed at $5.12, down 19 3/4 cents for the week. The secondary (intermediate-term) trend has turned down, with the SW.X testing initial support at $5.12 3/4. This price marks the 23.6% retracement level of the previous uptrend from $4.35 through the high of $5.36 3/4.

HRS Wheat (New-crop Futures): The Minneapolis September 2017 contract closed at $5.65 1/2 down 6 3/4 cents for the week. Despite the lower close the secondary (intermediate-term) trend remains up. However, resistance between $5.64 3/4 and $5.75 1/2 continues to hold. These prices mark the 50% and 61.8% retracement levels of the previous downtrend from $6.09 3/4 through the low of $5.20.

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