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 $3.89 1/2, up 2 3/4 cents for the week. The weekly close-only chart remains one of the most interesting in the commodity sectors studied in this blog. The secondary (intermediate-term) trend has turned sideways between $4.06 1/4 (close the week of September 18) and $3.81 1/4 (close the week of August 21). A downside breakout would imply Wave C (third wave) of a 3-wave downtrend is in place with a target of $3.56 1/4. However, an upside breakout would imply that the previous sell-off from $5.03 through the low weekly close of $3.81 1/4 made up the previous downtrend, suggesting the market is in Wave 3 of the next 5-wave uptrend with a target of $4.31 1/4. Weekly stochastics remain bullish following a crossover below the oversold level of 20% the week of September 11.

SRW Wheat (New-crop Futures): The Chicago July 2018 contract closed at $4.74, up 1 1/2 cents for the week. The contract posted a new low of $4.70 1/2 last week before rallying. This new low keeps the market in a secondary (intermediate-term) downtrend despite weekly stochastics in single-digits reflecting an extremely oversold situation.

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HRW Wheat (Cash): The DTN National HRW Wheat Index (HW.X, national average cash price) closed at $3.54 1/2, up 4 3/4 cents for the week. Similar to SR.X, the HW.X is in a secondary (intermediate-term) sideways trend between $3.39 1/4 and $3.70 1/4. A bearish breakout would suggest Wave C (third wave) of a 3-wave downtrend with a target price of $3.08 1/4. A bullish breakout would imply a move to Wave 3 (third wave) of a 5-wave uptrend with a target price of $4.01 1/4.

HRW Wheat (New-crop Futures): The Kansas City July 2018 contract closed at $4.74 3/4, up 2 cents for the week. The secondary (intermediate-term) trend remains down, with the contract testing its low of $4.71 1/4. Though weekly stochastics continue to indicate a sharply oversold situation, new-crop wheat has been able to generate little buying interest. Major (long-term) support remains at $3.95 on the market's continuous monthly chart.

HRS Wheat (Cash): The DTN HRS Wheat Index (SW.X, national average cash price) closed at $5.81 1/2, up 7 3/4 cents for the week. The SW.X looks to have established a secondary (intermediate-term) uptrend on its weekly chart. Friday's settlement was a new 4-week high, coinciding with a bullish crossover by weekly stochastics below the oversold level of 20%. If so the initial upside target (weekly close-only) is $6.08 3/4, a price that marks the 23.6% retracement level of the previous downtrend from $7.30 1/4 through the low weekly close of $3.71 1/4.

HRS Wheat (New-Crop Futures): The Minneapolis September 2018 contract closed at $6.33, up 3 1/2 cents for the week. New-crop Minneapolis spring wheat is in a secondary (intermediate-term) sideways trend with support at the 4-week low of $6.28 1/2 and initial resistance the recent high of $6.49.

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