The Barchart National HRW Wheat Price Index (HWPI, weighted national average cash price) extended its major (long-term) downtrend to a low of $7.6159 during August before rallying to close at $8.6516. This was 40.58 cents higher for the month. If the HWPI is able to string together a few months of moving higher, it would look to be Wave B (second wave) of the 3-wave downtrend pattern. Based on the market’s bullish fundamentals, indicated by inverted Kansas City future spreads, the upside target area is between $10.4152 and $11.0758. Monthly stochastics remain bearish, well above the oversold level of 20%.
The Barchart National SRW Wheat Price Index (SWPI) also extended its major (long-term) downtrend during August, hitting a low of $6.6755 before rallying to close at $7.6655. This was up 15.73 cents for the month, and looks to have completed a bullish spike reversal. If so, it could trigger a Wave B rally that could eventually test the $8.7993 to $9.4553 area. The upside isn’t quite as high for the SWPI, as compared to the HWPI, due to Chicago’s futures spreads still showing a neutral-to-bearish supply and demand situation.
The Barchart National HRS Wheat Price Index (HSPI) extended its major downtrend to a low of $7.8359 before rallying to close at $8.5249, up 10.55 cents for the month. The HSPI remains in a major downtrend, though near its target of $7.6931. This is the 61.8% retracement level of the previous uptrend from $4.1280 (September 2019) through the high of $13.4607 (May 2022). Monthly stochasitcs have crossed into oversold territory, but still showing time before a bullish crossover can be completed.