CBOT Wheat Futures

[farming101]

Outside day lower
500 retrace was at 818 1/2, low was 818 3/4. Turn around Tuesday?

[farming101]

NOPE!

[AlbertaFarmer5]

NOPE!

At what point does this go from being a correction within a bull market, to something else?

[farming101]

At what point does this go from being a correction within a bull market, to something else?

762 1/2 which fits with Errol's post above. This needed level for support will rise with time. Then you start looking for patterns like double tops, head and shoulders, etc.
Even then it could be called a soft landing although no one is going to like it. Some will say it went up too fast too soon. I would agree with that assessment. Remarkable that the 8.70 level held it. Possibilities for a more measured advance lasting through the winter. Good local pricing opportunities will likely move to specials with basis doing the heavy lifting. The feed market will underpin the market in western Canada.
Remember too, this is the Chicago contract. Although MW is not immune it is holding in better with a lot less stocks to make it to new crop. March spread between pits is now 234 MWH/ZWH. I'll readily admit I didn't think that would happen, which means I didn't think Chicago wheat would pull back this much.

[TechAnalyst]

At what point does this go from being a correction within a bull market, to something else?

I agree that the damage done doesn't appear to be lethal to the bull yet. And that with Chicago having a greater spec interest, it was far weaker during the liquidation. Kansas and Minneapolis hard wheats have faired much better.

In the short term, once the targets are hit (8.70 in this case), it is much more difficult to accurately predict what will happen. The selloff was severe enough I would expect a bounce to start the month. I agree with Farming that the rally will have to be watched for signs of a short term top.

In the long run, wheat still looks great on the weekly and monthly charts. The saucer on the monthly chart remains the guiding formation suggesting we are likely to see strong wheat markets through 2022 (unfortunately likely fueled by droughts).

My 2 cents worth.

[farming101]

At what point does this go from being a correction within a bull market, to something else?

March Chicago wheat closed at 7.56 today. Good support level at 7.46 1/2.

[wheatking16]

Taking a look at the WEAT ETF, we see a rise in prices on declining volume.

I don't focus too much on volume, however, it is difficult to trust rallies when it is declining.

Perhaps, someone else can comment on this.

I anticipate a 1-4 week pullback in both WEAT and CBOT beginning in the next week or two.

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We are on week 3 of the 1-4 week pullback and in the middle of previous supply.

[farming101]

Well, that "good support level" at 746 1/2 is being tested today

[wheatking16]

Well, that "good support level" at 746 1/2 is being tested today

Mister, you have been precise with your calls.

I am interested in your process if you are up for a little teaching.

Today's close is on the VWAP from the July low.