In Tuesday’s edition we warned that various commodities would probably present trading opportunities on the ‘long’ side in the near future. This was due to a bottom extension at a weekly scale in the commodity index that we follow most closely. Now there are some signals in Wheat to report that mean it is the second candidate of the group. A daily-scale compression formed yesterday in the December 2014 contract that may be breaking upward today. This matches the weekly-scale bottom extensions in the continuation price series that we saw recently, meaning that the downtrend is probably over and that rallies are now likely. The Ukraine/Russia situation adds to the potential as Ukraine is the ‘breadbasket’ of Central/Eastern Europe and the harvest is only just gathered. Charts:
It is a little early in the session to call for a ‘break’ as it is only 10.00 EST as I write but there is s risk that the price will run up more by the close. As a tactic, we suggest buying now with a close stop somewhere below yesterdays low, say at 540.