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 3/4, up 3/4 cent 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 1/2, down 1/4 cent for the week. The contract continues to consolidate between support at its low of $4.74 1/4 and initial resistance at $5.06 1/4. The latter marks the 23.6% retracement level of the previous downtrend from $6.09 1/2 through the contract low. Weekly stochastics continue to hold below the oversold level of 20%.

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HRW Wheat (Cash): The DTN National HRW Wheat Index (HW.X, national average cash price) closed at $3.60 1/4, down 5 3/4 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 $4.86 3/4, down 4 cents for the week. July Kansas City wheat continues to consolidate between support at its contract low of $4.71 1/4 and initial resistance at $5.07. The latter marks the 23.6$ retracement level of the previous downtrend from $6.23 through the contract low. Weekly stochastics continue to hold below the oversold level of 20%.

HRS Wheat (Cash): The DTN HRS Wheat Index (SW.X, national average cash price) closed at $5.80 1/2, up 3 1/4 cents for the week. The SW.X continues to consolidate near support at $5.82 1/2, a price that marks the 50% retracement level of the previous uptrend from $4.35 through the high of $7.30 1/4. Weekly stochastics below the oversold level of 20% and in position for a bullish crossover signaling a move to a secondary (intermediate-term) uptrend. Initial resistance is at the 4-week high weekly close of $5.84 3/4.

HRS Wheat (New-Crop Futures): The Minneapolis September 2018 contract closed at $6.44 1/4, up 10 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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