Do to the large spikes seen during March, I’ve applied the Wilhelmi Element (The only price that matters is the close) to all three cmdty National Wheat Price Indexes this month. This means I’m analyzing the monthly close-only charts.
Chicago SRW Wheat: The cmdty National SRW Wheat Price Index (SWPI) extended its major (long-term) uptrend to a new high monthly close near $9.38. If the market goes into a period of consolidation, it will take a number of months before completing a bearish reversal pattern of moving to a new 4-month low monthly close. Heading into April, that price is down near $7.17 from this past January. With two months remaining in the 2021-2022 marketing year, and no old-crop futures spreads to study, the new-crop forward curve remains bullish, as indicated by Chicago’s inverted July22-to-May 23 forward curve.
Kansas City HRW Wheat: The cmdty National HRW Wheat Price Index (HWPI) is showing a similar pattern to the previous discussed SWPI. The HWPI extended its major (long-term) uptrend to a high monthly close near $9.68 at the end of March. A bearish 4-month reversal would mean it needs to close below $7.66 (January 2022) when April comes to an end. While possible, the probability of such a strong selloff is low, particularly with new-crop fundamentals still incredibly bullish. The Kansas City July22-to-May23 forward curve closed March at an inverse of 49.25 cents. This tells us fundamentals will remain bullish for the foreseeable future.
Minneapolis HRS Wheat: The cmdty National HRS Wheat Price Index (HSPI) extended its major (long-term) uptrend during March, posting a monthly close near $10.22. Fundamentally the market remains bullish, with both the new-crop September22-to-July23 forward curve still inverted. However, if we use our collective imagination we can see a path where the HSPI establishes a head and shoulders topping pattern on its continuous monthly close-only chart. The key will be how the HSPI reacts over the coming months, most notably if it is able to once again extend its major uptrend.