Technically Speaking

Weekly Analysis: Wheat Markets

Darin Newsom
By  Darin Newsom , DTN Senior Analyst
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Source; DTN ProphetX

SRW Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $4.78, down 24 1/4 cents for the week. The SR.X extended is now in a secondary (intermediate-term) downtrend with last week's sell-off confirming the bearish crossover by weekly stochastics the previous week. Initial support is at $4.65, a price that marks the 23.6% retracement level of the previous uptrend (weekly close-only) from $3.44 through the recent high of $5.02 1/4. The 38.2% and 50% support levels are down at $4.41 3/4 and $4.23 1/4 respectively. Given wheat's bearish fundamentals, indicated by the strong carry in its futures spreads, a 76.4% retracement back to $3.81 1/2 is possible.

SRW Wheat (New-crop Futures): The Chicago July 2018 contract closed at $5.69, down 17 cents for the week. The July 2018 contract established a minor (short-term) downtrend last week with daily stochastics posting a bearish crossover above the overbought level of 80% on Wednesday's close. Next support is at $5.63 1/2, a price that marks the 38.2% retracement level of the previous minor uptrend from $4.89 1/4 through the recent high of $6.09 1/2. The 50% retracement level is down at $5.49 1/4, the 61.8% level at $5.35, and the 76.4% retracement level down at $5.17 1/2.

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HRW Wheat (Cash): The DTN National HRW Wheat Index (HW.X, national average cash price) closed at $4.46 1/4 down 27 1/4 cents for the week. As discussed last week, cash HRW wheat's secondary (intermediate-term) trend is now down. Initial support on its weekly close-only chart is at $4.30 1/4, the 23.6% retracement level of the previous uptrend from $2.89 3/4 through the recent high of $4.73 3/4. With weekly stochastics still above 80% the HW.X could see a 38.2% to 61.8% retracement, putting support between $4.03 1/2 and $3.60.

HRW Wheat (New-crop Futures): The Kansas City July 2018 contract closed at $5.79, down 19 cents for the week. New-crop Kansas City wheat's secondary (intermediate-term) trend is now down with next support at $5.71 1/2, a price that marks the 38.2% retracement level of the contract's lifetime range from $4.88 1/2 through the recent high of $6.23. The 50% retracement level is down at $5.55 3/4 with the 61.8% mark down at $5.39 3/4.

HRS Wheat (Cash): The DTN HRS Wheat Index (SW.X, national average cash price) closed at $7.18, down 7 3/4 cents for the week. Indications are that the market's secondary (intermediate-term) trend is still down after the SW.X closed lower for the second consecutive week. Weekly stochastics remain bearish above the overbought 80% level following a bearish crossover the week of July 3. Initial support id between $6.60 1/2 and $6.32 3/4.

HRS Wheat (New-crop Futures): The Minneapolis September 2017 contract closed at $7.58, down 8 3/4 cents for the week. The contract's secondary (intermediate-term) trend remains down following the previous week's activity that showed both a spike reversal and bearish crossover by weekly stochastics. September Minneapolis wheat is testing support near $7.35 1/2, a price that marks the 38.2% retracement level of the previous uptrend from $5.20 through the recent high of $8.68 1/2. The 50% retracement level is down at $6.94 1/4.

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