The Wheat market is definitely in a downtrend right now, and if we look at the 6 month chart we stand at $7.42 a bushel as of the close of last week. If we break $7.20 a bushel, then there are going to be a lot of sell stops positioned to sell Wheat lower to the next level of support at $6.84 a bushel. If this level fails to hold look out below as $5.85 is the next major level of support on the five-year weekly continuation chart and should hold.
Support Levels
Now Wheat should bounce around the $7.00 a bushel area, probably first busting through it, and then spiking above it as price tries to find its equilibrium after establishing a new low. And obviously $6.00 a bushel provides a level of support being both a round number, which is heavily guarded, and near the two year low in the contract. This is another area where I would expect Wheat to first push below $6.00 a bushel, then spike above it several times before making a strong run at the $5.85 level.
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