The HRW Wheat Price Index (IHY00, national average cash price) still looks to be in a major (long-term) uptrend based on a bullish spike reversal during March 2024. The key will be if the index is able to hold the March low of $5.0960 during this selloff, what could be considered a Wave 2 move. Theoretical Positions: While 2023 cash bushels have likely been sold, traders could’ve gone long the market near the March settlement of $5.3819 based on the latest bullish spike reversal. If so, sell stops would be placed below the March low of $5.0960.
The SRW Wheat Price Index (IWY00) is a difficult read heading into July. The spike rally during May is looking more like a characteristic wheat head fake, with activity during June appearing to have completed a bearish 2-month reversal. If we squint our eyes just right we could make the argument the Index has rolled from a 5-wave uptrend to a 3-wave downtrend. The key will be if it takes out the previous low of $4.7437. The Index posted a low of $4.9242 in late June before finishing the month at $5.0607. Theoretical Positions: I don’t see where traders would have a position at this time.
The HRS Wheat Price Index (IPY00) looks to have moved back into a major downtrend as it fell to a new low of $5.5185 during June before settling at $5.6463, down $1.3531 for the month. As always, this could be a characterizing wheat head fake, but we’ll see what happens during July. Theoretical Positions: There are no positions at this time.
The Teucrium Wheat Fund (WEAT) still looks to be in a major uptrend despite the sharp selloff seen during June. Similar to the HRW Index, this looks to be a Wave 2 selloff within the 5-wave uptrend pattern with the key being WEAT’s ability to hold above the March 2024 low of $5.02. The June low was $5.16 before the fund closed at $5.31. Theoretical Positions: Traders could’ve bought WEAT near the March close of $5.41 with sell stops below the March low of $5.02. Additional longs may have been added at the new 4-month high beyond $5.97. If so, the average long position would be near $5.69 with sell stops below the March 2024 low of $5.02. It’s possible traders add one more round of long positions near the June settlement of $5.31, lower the average position to $5.56.
