September soft red wheat futures (ZWU25) present a buying opportunity on more price strength.
See on the daily bar chart for September soft red winter wheat futures that prices are now trending higher and this week hit a nearly three-month high. See, too, at the bottom of the chart that the moving average convergence divergence (MACD) indicator is in a bullish posture as the red MACD line has this week moved above the blue trigger line and both lines are trending up. The wheat bulls have the near-term technical advantage to suggest more price upside in the near term.
Fundamentally, weather in U.S. wheat country now leans a bit price-friendly. Net drying is expected across the Plains today into Sunday, with extreme heat and winds as a high-pressure ridge builds in. Also, Krasnodar, one of Russia’s largest grain-producing regions, has declared a state of emergency due to drought. Earlier this month, Rostov, another large grain-producing region in Russia, announced a state of emergency due to drought.
A move in September SRW wheat futures above chart resistance at this week’s high of $5.91 would become a buying opportunity. The upside price objective would be $6.60 or above. Technical support, for which to place a protective sell stop just below, is located at $5.63.
IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
