The cmdty National HRW Wheat Price Index (HWPI, weighted national average cash price) extended its major (long-term) downtrend during March, reaching a low of $5.2129 before closing the month at $5.43. This was down 56.69 cents from February’s close of $5.9959. Note it was over the course of February the HWPI established a bearish spike reversal on its monthly chart, confirming a new major downtrend indicated by the bearish crossover by monthly stochastics above the overbought level of 80% also at the end of February. The downside target area for this 3-wave downtrend pattern is between $4.8768 and $4.0228. With the cmdty National HRW Basis Index still bullish and the carry in the new-crop July 2021-to-May 2022 forward curve covering a neutral level of calculated full commercial carry, the HWPI would be expected to find support in the $4.8768 to $4.4498 range. The latter marks the 50% retracement level of the previous uptrend from $2.6403 (August 2016) through February’s high. This being a 3-wave downtrends pattern, a Wave B (second wave) rally would be expected before harvest gets rolling in late May through early June. The HWPI’s weekly chart shows an oversold situation meaning some intermediate-term buying interest could soon be seen.
