August 13, 2009
Bears take full control of Chicago wheat
Soft red winter wheat futures at the Chicago Board of Trade overnight hit a fresh two-plus year low of US$5.06 a bushel, basis the December contract.
Prices are in a solid 10-week-old downtrend on the daily bar chart and the bears are in firm technical command.
A close in December wheat futures below major psychological support at US$5.00 a bushel would produce more chart damage to suggest a challenge of the 2008 low of US$4.55 a bushel, basis nearby futures. Below that lies major psychological support at US$4.00.
For the beleaguered wheat market bulls to begin to regain some technical footing, they will have to close December futures prices above solid technical resistance at US$5.60. Below that price level does lie near-term technical resistance at US$5.25 and then at US$5.50.
