July soft red winter wheat futures at the Chicago Board of Trade have recovered in solid fashion from early last week’s sharp downside price action that produced what was at the time a big and bearish “outside day” down on the daily bar chart. An outside day down occurs when the session high is higher and the low is lower than the previous session’s trading range, with a lower close. The wheat market bulls have kept in place a four-week-old uptrend on the daily bar chart. Prices are now also closing in on strong overhead technical resistance that is located at the April high of $5.14 3/4, basis July Chicago wheat futures. A close above that price level would open the door to a quick challenge of chart resistance at $5.25. Above that lies stronger chart resistance located at the March high of $5.36 3/4.
Chart support for July wheat futures is located at Wednesday’s low of $5.02, at $5.00 and then at $4.91. A close below technical support at $4.80 in July Chicago wheat would provide the bears with fresh downside near-term technical momentum to suggest a retest of the contract low of $4.60 1/2, or below. Stay tuned!–Jim Wyckoff