September soft red winter wheat (ZWU26) futures present a selling opportunity on more price weakness.
See on the daily bar chart for September soft red winter wheat futures that prices have sold off from last week’s contract high. Recent downside price action has produced a bearish “key reversal” down on the daily chart, as well as a rare and bearish broadening pattern at higher price levels. Both are chart clues that a market top is in place.
Fundamentally, there have been rumors in recent days, but so far not confirmed, that Russia and Ukraine have been talking to each other regarding stopping their attacks on shipping around the Black Sea. That region is a major grain-shipping route. Falling crude oil (CBU26) prices this week have also been bearish for the grain futures markets.
A move in September SRW wheat futures below chart support at the overnight low of $6.52 would become a selling opportunity. The downside price objective would be $5.70 or below. Technical resistance, for which to place a protective buy stop just above, is located at $6.85.
IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%):
Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
On the date of publication, Jim Wyckoff did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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