Wheat Futures—Wheat futures in the December contract is currently trading at 5.28 a bushel after settling last Friday in Chicago at 5.08 up about $0.20 for the week hitting a 3 month high. I am recommending a bullish position over the last month or so from around the 4.82 level and if you took that trade continue to place the stop loss under the 10-day low which stands a 4.85 as an exit strategy as I still think there is significant room to run to the upside.
Heavy snow has entered key wheat growing regions as that is what is supporting prices at the current time with the next major level of resistance at the July 15th high of 5.43 and if that is broken I think we could test the June 27th contract high of 5.65 in the coming weeks ahead as the volatility certainly will start to expand to the upside.
Wheat prices are trading above their 20 and 100 day moving average as that tells you that the trend is higher as the chart structure will not improve for another 5 trading sessions so you will have to accept the monetary risk at this time.
I will be looking at adding more contracts to the upside once the risk/reward becomes more in your favor as adding to winners while cutting losers is the way to trade over the course of time so stay long as this trend is getting stronger on a weekly basis.
CHART STRUCTURE: POOR
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