March 3, 2009
CBOT wheat bears have technical power
Chicago Board of Trade May soft red winter wheat futures closed lower Friday (February 27), hitting a fresh 2 1/2-month low and finishing at a bearish weekly and monthly low close. Prices are also in a two-month-old downtrend on the daily bar chart.
Indeed, the wheat market bears do have the solid near-term technical advantage and are looking for more on the downside in the near term. The next downside price objective for the powerful wheat market bears is to push and close May futures prices below major psychological support at US$5.00 a bushel. Below that lies strong technical support at the contract low of US$4.84 1/4, scored in December.
For the wheat market bulls to begin to regain some near-term upside technical momentum, they would have to push and close May futures prices back above solid trend-line and flat-line technical resistance at US$5.45 a bushel.
"Seasonality" price studies do show wheat futures prices trending lower into the June timeframe.
