Blogging by the Bushel
With numerous challenges over the past several years for producers, we at Mercer Landmark understand the need for a comprehensive risk management solution. We seek to provide our customers with unparalleled service to ensure maximum results.

Just one day after posting new contract lows, July 15 wheat was able to put together a nice recovery effort on Wednesday. For the first time in four days, the market finished a session posting both a higher high and a higher low. This could signal the recent downward trend may be changing. However, despite the rally, prices still couldn’t manage to break the contracts major chart formation – a nearly month-long descending trend channel.

Tough resistance sits at the top of the recent trend channel and the March and Mid-April lows near $4.84 ½. If the upward momentum can carry the market through the trend-channel top, look for stiff resistance at the combination of the contract’s long-term trend line and 50-day moving average, which both sit just above 500. Support comes in at the recently pegged contract lows, with further support at the bottom of the trend channel near $4.50.

The wheat market remains vulnerable to short covering and momentum rallies as the Fund position remains a record short and the market still sits in deeply oversold territory. Wednesday was a good example of what can happen when too many traders get to one side of the boat. Some rocking is inevitable. With that said, the fundamentals and technicals still point the wheat market lower. It will be interesting to see what, if any, follow-through momentum Thursday can do to push more shorts off what is now a very crowded boat.

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