March HRW wheat futures (KEH26) present a buying opportunity thanks to further price strength.
See on the daily bar chart of March hard red winter wheat futures that Tuesday’s prices hit a three-week high. Also see at the bottom of the chart that the Moving Average Convergence Divergence indicator just produced a buy signal when the blue MACD line crossed above the red trigger line.
Crucially, wheat futures are heading for a fifth consecutive day of gains today, the longest rally since April, as Black Sea supply risks and climate uncertainties support prices. Russian forces launched a missile and drone attack across Ukraine on Tuesday, killing civilians and damaging port and energy facilities in the Black Sea region of Odessa, according to Ukrainian officials. Drought is also increasing in US HRW wheat producing regions, helping to support prices. “Dry weather accompanies record heat across the central and southern Plains,” the USDA said in a report Tuesday.
A move in March HRW wheat futures above the chart resistance at $5.35 would give the bulls more power and also become a buying opportunity. The upside price target would be $6.20 or higher. Technical support, for which a protective sell stop can be placed just below, is at $5.00.
IMPORTANT NOTE: I am not a futures broker and I do not manage any trading accounts other than my personal account. My goal is to point you to potential business 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 can initiate. Any trade I analyze is hypothetical in nature.
Here’s 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 investing 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 beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations when entering into those contracts. You should understand your risk exposure and other aspects of trading by carefully reviewing the risk disclosure documents your broker is required to provide you.
As of the date of publication, Jim Wyckoff had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com