Trends:
- The secondary trend remains down on the contract’s weekly chart, dating back to a bearish 2-week reversal the week of May 10.
- However, the contract has not posted a new 4-week low
- September Minneapolis also left a bullish gap on its weekly chart between last week’s high of $7.4150 and this week’s low of $7.50
- The minor uptrend has quickly moved higher, pulling daily stochastics closer to the overbought level of 80%.
- This move looks to be Wave B (second wave) of the 3-wave secondary downtrend pattern
Fundamentals:
- New-crop spring wheat fundamentals remain bullish, as indicated by the weak carry in the September21-to-July22 forward curve.
Theoretical Position:
- New sales could be put in place on this rally.
- However, we need to keep in mind the possibility of reduced production potential due to drought.
- For now the target could be just short of $8.00, then just below the contract high of $8.1075.
