March wheat futures at the Chicago Board of Trade on Wednesday saw prices touch a fresh three-month high of $6.46 1/4 a bushel. However, prices then backed off by the close Wednesday to close solidly lower, near the session low and produce a bearish “outside day” down on the daily bar chart. The market on Thursday morning was poised to post follow-through selling pressure. The wheat bulls have faded late this week and the bulls do not want to see a bearish weekly low close on Friday, which would suggest a near-term market top is in place and that prices could drop back down to challenge major psychological resistance at $5.00.
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Technical support is located at the $6.00 level, at $5.92 and then at last week’s low of $5.84 3/4. On the upside, near-term chart resistance is located at $6.11, at $6.25 and then at this week’s high of $6.46 1/4. A close above this week’s high would provide the bulls with fresh upside near-term technical momentum to suggest a challenge of psychological resistance at $7.00 a bushel, basis March Chicago futures. Stay tuned!–Jim Wyckoff