March soft red winter wheat futures at the Chicago Board of Trade are presently in a choppy, two-month-old uptrend on the daily bar chart. However, stiff technical resistance lies overhead, at the November high of $6.04 3/4 a bushel. A close above that key technical resistance level would provide the wheat market bulls with fresh upside near-term technical momentum to then suggest a challenge of major psychological resistance of $7.00 a bushel.
A close in March Chicago wheat below solid technical support at last week’s low of $5.52, which is also the last “reaction low” in the up-trend on the daily chart, would negate the up-trend, dent the bullish enthusiasm and begin to suggest that a near-term market top is in place. Importantly, the wheat futures market has been heavily influenced recently by the key “outside markets” that include the U.S. dollar index, crude oil prices and U.S. stock index futures prices. As long as the dollar index continues to trend lower while crude oil and stock index futures trend higher, then the path of least resistance in wheat futures will remain sideways to higher. Stay tuned! Jim Wyckoff