Just as I did last month, I’m employing the Wilhelmi Element (The only price that matters is the close) to my analysis of the cmdty National SRW Wheat Price Index (SRPI, weighted national average cash price). This removes a lot of the noise and uncertainty standard bar charts can create and clearly illuminate the key question: What is the trend (price direction over time)?
This monthly close-only chart clearly shows the SRPI major (long-term) trend to be up, with initial support at the previous 4-month low monthly close of $6.5985. Granted, that’s a long way down from November’s final calculation of $7.3639, but such is the nature of strong major uptrends. There are concerns for the market with monthly stochastics establishing a bearish crossover above the overbought level of 80% at the close of February 2021, though the SRPI has yet to confirm a new major downtrend since. The market also has a situation where the March-May futures spread has been trending down, before abruptly turning back up as December got under way. For now, if long cash SRW wheat one can continue to hold, knowing there is a large risk before a technical turn signal is confirmed.
Otherwise, cash SRW near $7.40 is historically a good sale.
