Factor Alert, June 14, 2017 — Wheat

The initial target of 6.44 in July Mpls Wheat was met today. The weekly chart is only two weeks into a major bull trend. Targets of 6.94 and 8.13 remain valid. Factor covered longs today and I will monitor this market for a reentry opportunity.

The weekly continuation graph displays an 18-month H&S bottom pattern. The right shoulder high of 4.75 is the key level to watch. The target would be 5.79 if the bottom is completed.

The weekly graph of the Jul contract displays an extremely rare compound fulcrum bottom. This pattern originates from point and figure charting. An idealized compound fulcrum is drawn on the chart — the pattern is basically an “M” pattern that breaks out to the upside.

As shown on the long-term quarterly graph, Chicago Wheat is in an area of historic support.

The weekly chart of the Jul contract also displays a possible compound fulcrum bottom, pending a decisive close above 4.62.

The daily continuation graph displays a well-defined 4-month rectangle with an upper boundary at 4.63.

The advance in the Wheat market has been led by the high protein Mpls hard spring variety. As shown on the chart below, the $2 premium of Mpls Wheat over Chicago Wheat is moving the a pricey level — although Mpls Wheat has by far the most favorable fundamentals in this crop year.

I will be monitoring Mpls for a reentry in Chicago and KC for buying opportunities.

plb

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