The Barchart National HRW Wheat Price Index (HWPI, weighted national average cash price) looks to have collapsed into a major (long-term) downtrend. As discussed in this space last month, the HWPI had not completed a bearish reversal through the end of June, but quickly remedied that by taking out the previous 4-month low (the June mark of $8.9965) on July 1. The next downside target is near $8.31, with a test possibly leading to a Wave B (second wave) within the new 3-wave major downtrend. Fundamentally the market is mixed with basis bearish and futures spreads neutral-to-bullish. This opens the door to a possible 61.8% retracement back to near $7.15 long-term.
Similar to the HWPI, the Barchart National SRW Wheat Price Index (SWPI) looks to have immediately rolled to a major (long-term) downtrend, confirmed with the July 1 move to a new 4-month low below the June mark near $8.10. Fundamentally SRW wheat basis was bearish while futures spreads were neutral-to-bearish at the end of the month, indicating the SWPI could extend its major downtrend to the 61.8% retracement level near $7.09. We need to keep an eye out for a potential Wave B (second wave) rally within the 3-wave major downtrend, with the move providing an opportunity for additional sales.
As with the other wheat indexes, the Barchart National HRS Wheat Price Index (HSPI) has moved into a major (long-term) downtrend, officially confirmed as the index posted a new 4-month low on July 1. Initial support is at the 50% retracement level near $8.86, while market fundamentals remain bearish (basis) to neutral (Minneapolis wheat futures spreads). Eventually the HSPI could make its way back to the 61.8% retracement level near $7.69 meaning a Wave B (second wave) bounce will likely set up a potential selling opportunity.