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 $3.93 11 3/4 cents for the week. While the SR.X remains in a secondary (intermediate-term) 3-wave downtrend, Wave A (first wave) looks to have come to an end with a test of support near $3.81 1/2. This price marks the 76.4% retracement level of the previous 5-wave uptrend from $3.44 through the high of $5.03. Given the continued bearishness of the market's fundamentals Wave B (second wave) could be limited to a test of resistance between $4.09 3/4 and $4.27 1/2.

SRW Wheat (New-crop Futures): The Chicago July 2018 contract closed at $4.85 3/4, up 1/4 cent for the week. The contract remains in secondary (intermediate-term) 3-wave downtrend. However, last week's spike rally off the new contract low of $4.74 1/4 could be signaling an end to Wave A. If so Wave B (retracement wave) could test resistance between $5.06 and $5.27 3/4, prices that mark the 23.6% and 38.2% retracement levels of Wave A from the high of $60.9 1/2.

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HRW Wheat (Cash): The DTN National HRW Wheat Index (HW.X, national average cash price) closed at $3.51 1/4, up 11 3/4 cents for the week. The market remains in a 3-wave secondary (intermediate-term) downtrend though the recent low weekly close of 3.39 1/4 looks to be the end of Wave A (first wave). If so, and given the market's continued bearish fundamentals, Wave B (retracement wave) could be limited to resistance between $3.71 and $3.90 3/4, prices that mark the 23.6% and 38.2% retracement level of Wave A from $4.73 3/4 through $3.39 1/4.

HRW Wheat (New-crop Futures): The Kansas City July 2018 contract closed at $4.87, up 4 cents for the week. Similar to the other winter wheat markets new-crop Kansas City wheat's secondary (intermediate-term) trend remains down. However, last week's spike reversal could be indicating Wave B (retracement wave) is beginning with resistance expected between $5.07 and $5.29 1/4.

HRS Wheat (Cash): The DTN HRS Wheat Index (SW.X, national average cash price) closed at $5.79, down 33 1/2 cents for the week. The market's secondary (intermediate-term) trend remains down with the SW.X testing support t $5.82 1/2. This price marks the 50% retracement level of the previous uptrend (weekly close-only) from $4.35 through the high of $7.30 1/4.

HRS Wheat (New-Crop Futures): The Minneapolis September 2018 contract closed at $6.25, down 6 1/2 cents for the week. New-crop Minneapolis spring wheat remains in a secondary (intermediate-term) downtrend, though consolidating in what looks to be a bearish pennant formation. If so then downtrend may have reached its midpoint. Support is at the 4-week low of $6.20.

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