My monthly analysis of the key grain and oilseed markets will focus on the cmdty National Price Indexes (weighted national average cash prices). Recall from numerous previous discussions I view these as the intrinsic value of the individual markets meaning long-term monthly charts give us a good read on outlook.
The monthly chart for the cmdty National HRW Wheat Price Index (HWPI) looks similar to what was discussed in spring wheat, with a nearly vertical move occurring since the July 2021 low of $5.5357. This mark is also the previous 4-month low, a momentum factor I doubt will come into play any time soon. The HWPI is sharply overbought, with monthly stochastics sitting above 90% at the end of October. Again, this does not tell us the market is going down long-term, but rather we need to keep an eye out for a reversal pattern that would confirm the HWPI is rolling over into a major (long-term) downtrend. The most likely candidates, given the October settlement near the monthly high, is a spike reversal or 2-month reversal. I’ll keep you posted as November unfolds.
