The Barchart National HRW Wheat Price Index (HWPI, weighted national average cash price) remains in a major (long-term) 3-wave downtrend. Wave C (third wave) is expected to take out the Wave A (first wave) low of $7.6159 from August. The next downside target is $7.1520. Monthly stochastics remain bearish above the oversold level of 20% indicating the HWPI has time and space to move lower. Theoretical Positions: Possibly short from the October settlement of $9.3258 based on a bearish spike reversal peaking Wave B.
The Barchart National SRW Wheat Price Index (SWPI) looks to have completed its major 3-wave downtrend. The index took out its Wave A low of $6.6755 as it fell to $6.5668 before rallying to close higher for the month. This completed a bullish spike reversal, despite monthly stochastics not establishing a bullish crossover below the oversold level of 20%. Theoretical Positions: New longs could be established near December’s settlement of $7.3383 with additional longs added on a test of the December low of $6.5668 during January.
The Barchart National HRS Wheat Price Index (HSPI) looks to be in a sideways pattern with monthly stochastics holding near the oversold level of 20%. Theoretical Positions: Short positions from the October settlement of $9.0518 would be covered with a move to a new 4-month high beyond $9.4639. The next downside target is near $7.6931.