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 $4.03, down 3 1/4 cents for the week. The SR.X remains in a secondary (intermediate-term) 3-wave downtrend, with Wave A (first wave) ending at 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 last week's sell-off, Wave B looks to have peaked near initial resistance at $4.09 3/4, the 23.6% retracement of Wave A. If so, Wave C would be expected to extend to $3.44, a full retracement of the previous uptrend from $3.44 through the high weekly close of $5.02 1/4.

SRW Wheat (New-crop Futures): The Chicago July 2018 contract closed at $4.90 3/4, down 3.50 cents for the week. The contract remains in a secondary (intermediate-term) 3-wave downtrend with Wave A (first wave) ending at the low of $4.74 1/4 (week of August 28). Wave B (second wave) looks to have peaked with last week's high of $5.06, a test of thee 23.6% retracement level of Wave A from $6.09 1/2 through the low of $4.74 1/4.

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HRW Wheat (Cash): The DTN National HRW Wheat Index (HW.X, national average cash price) closed at $3.66 1/4, down 4 cents for the week. The market remains in a 3-wave secondary (intermediate-term) downtrend with the recent low weekly close of 3.39 1/4 the end of Wave A (first wave). Wave B (retracement wave) looks to have peaked with a test of resistance at $3.71, a price that marks the 23.6% retracement level of Wave A from $4.73 3/4 through $3.39 1/4. The Wave C (third wave) target is $3.33 1/4.

HRW Wheat (New-crop Futures): The Kansas City July 2018 contract closed at $4.90 3/4, down 6 3/4 cents for the week. Similar to the other winter wheat markets, new-crop Kansas City wheat's secondary (intermediate-term) trend remains down. Wave B (second of three) peaked with last week's test of resistance at $5.07.

HRS Wheat (Cash): The DTN HRS Wheat Index (SW.X, national average cash price) closed at $5.77 1/4, down 7 1/2 cents for the week. With weekly stochastics below the oversold level of 20%, cash spring wheat could soon run out of selling interest. Still, technically, the market's secondary (intermediate-term) trend remains down with next support at $5.47 3/4. This price marks the 61.8% 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 $6.34 1/4, down 2 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 continues. If so, the downtrend may have reached its midpoint. Support is at the recent low of $6.20.

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