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Wheat Futures Still Mired in a Downtrend

00:00AM Oct 01, 2008
     December Chicago soft red winter wheat futures at the Chicago Board of Trade remain mired in a 6.5-month-old downtrend on the daily bar chart, from the March 13 contract high of $12.84 a bushel. Prices this week scored a fresh 12-month low of $6.62 1/2 a bushel. Indeed, prices have lost nearly 50% of value since the contract and all-time high scored in March.
    Wheat bears remain in near-term technical control. They have recently pushed prices below major psychological support at $7.00 and now their next downside price objective is to produce a close below solid technical support at $6.50, basis December futures. Below that lies psychological support at $6.00 a bushel.
    For the wheat market bulls to begin to regain some upside near-term technical momentum they will have to produce a close above solid technical resistance at $7.30. Above that lies resistance at last week's high of $7.60 and then at the August low of $7.71.
    Importantly, wheat futures traders will continue to keep one eye on the key "outside markets"--crude oil and the value of the U.S. dollar. At present, the appreciating dollar and downtrending crude oil futures prices are bearish for wheat and the other grain markets.