Technically Speaking

Weekly Analysis: Wheat Markets

By Darin Newsom , DTN Senior Analyst
Source: DTN ProphetX

SRW Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $4.25 1/4, down 25 cents for the week. The SR.X remains in a secondary (intermediate-term) downtrend testing support at $4.23 1/4. This price marks the 50% retracement level of the previous uptrend (weekly close-only) from $3.44 through the high weekly close of $$5.02 1/4. While cash SRW could see a minor (short-term) rally, bearish fundamentals indicated by the strengthening carry in the futures market forward curve would suggest a test of the 61.8% to 76.4% retracement levels of $4.04 1/2 and $3.18 1/4.

SRW Wheat (New-crop Futures): The Chicago July 2018 contract closed at $5.25 1/4, down 19 cents for the week. The secondary (intermediate-term) trend remains down with next support at $5.20 1/4. This price marks the 67% retracement level of the previous uptrend from $4.76 1/4 through the high of $6.09 1/2. Given weekly stochastics are still bearish the contract could look at testing the 76.4% retracement mark of $5.07 1/2.

HRW Wheat (Cash): The DTN National HRW Wheat Index (HW.X, national average cash price) closed at $3.91 1/2 down 23 3/4 cents for the week. The market's secondary (intermediate-term) trend remains down with next support at $3.18 3/4. This price marks the 50% retracement level of the previous uptrend from $2.89 3/4 through the high of $4.73 3/4. While a test of the 50% level could lead to a minor (short-term) rally, bearish futures spreads and continued bearish weekly stochastics would suggest a test of the 61.8% and 76.4% retracement levels of $3.60 and $3.33 1/4.

HRW Wheat (New-crop Futures): The Kansas City July 2018 contract closed at $5.34 1/4, down 17 3/4 cents for the week. New-crop Kansas City wheat's secondary (intermediate-term) trend remains down with next support at $5.20 1/4. This price marks the 76.4% retracement level of the contract's lifetime range from $4.88 1/2 through the $6.23. Weekly stochastics remain bearish well above the oversold level of 20%.

HRS Wheat (Cash): The DTN HRS Wheat Index (SW.X, national average cash price) closed at $6.72 1/2, down 27 cents for the week. The market's secondary (intermediate-term) trend remains down with initial support at $6.60 1/2. This price marks the 23.6% retracement level of the previous uptrend (weekly close-only) from $4.35 through the high of $7.30 1/4.

HRS Wheat (Futures): The Minneapolis December 2017 contract closed at $7.29 1/4, down 21 3/4 cents for the week. The contract's secondary (intermediate-term) trend remains down. However last week saw support at $7.25 1/2 hold, setting up a potential minor (short-term) uptrend. If so initial upside targets are $7.49 1/2 and $7.67 1/2, prices that mark the 23.6% and 38.2% retracement levels of the sell-off from $8.43 through last week's low of $7.20 3/4.

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