Price action in the wheat market remains strong as we head into the spring and summer months here in the northern hemisphere. Given the uncertainty in the Ukraine, an argument could be made that there is some war premium built into this market at the current prices; however, recent reports show a strong global supply of wheat.
Regardless, prices remain strong and wheat is now entering new contract highs for the July ’14 futures. Given the near-term positive momentum in this market, the higher probability opportunity appears to be on the long side of wheat until either the technical or fundamental landscape changes.
Local support comes into play around 724’2 with additional structure around 717’4. Aside from local support pivots, there is an intermediate-term trendline that intersects the market around the 707’0 area on the chart today. In the event of any downside pressure heading into this week’s close, look for price to stabilize above this trendline.
Provided price is near contract highs, there is not too many relevant resistance pivots on the July contract chart other than 736’0 and the high at 744’0. There appears to be valid opportunity on the long side of wheat, at least in the near term.
Keep in mind that there is a WASDE grain report later today at 11 am CT which will likely add some additional volatility to price action.
Wheat 30-minute Bar Chart (e-Signal)