Daily Commodities Update: Wheat

A shallow retracement in the grain complex, led by wheat and corn futures, has set up another technical pattern for short term weakness in these markets that may materialize during Tuesday’s trading session. The nearby wheat futures have already executed a breakout signal from the Rising Channel chart pattern illustrated here on the 240-minute timeframe.

This Channel Up pattern was initially breached during last week’s decline, but Friday’s reversal brought a retest of the underside of the channel. Monday’s price action appears to be a failure to recapture the channel support, which encourages the likelihood that the breakout will continue towards he projected downside price forecast.

The downside target is currently projected for a minimum of $6.83 per bushel in the nearby Wheat futures, with a lower end of the range at $5.92 per bushel also possible. This would represent a significant break in the upward momentum of this bull market, opening the door for a longer term decline in prices which may depend largely on weather and crop progress as the Northern Hemisphere growing season unfolds.

(Source: http://www.commoditiesmansion.com/general-commodities/daily-commodities-update-wheat-5/)