I Am Bearish Wheat Prices

01/09/2015 7:00 am EST

Focus: COMMODITIES

Michael Seery of SeeryFutures.com is currently bearish wheat prices but will sit on the sidelines and wait for a little better chart structure to develop and he urges keeping a close eye on the downside in the wheat market as traders await Monday’s USDA crop report.

Wheat Futures: Wheat prices in the March contract hit a 5-week low, currently down $.08 in Chicago Thursday afternoon, currently trading at 5.71 a bushel as prices have topped out in my opinion, however the chart structure at the current time is poor as I’m bearish this market, but I will sit on the sidelines and wait for a little better chart structure to develop which could happen in the next couple of days, so keep a close eye on the downside in the wheat market as traders await Monday’s USDA crop report.

Wheat prices have dropped about $1.00 from the peak, as the Russian situation has calmed down quite a bit, as there are still large supplies worldwide, as growing conditions in the United States are not suffering any crop damage at the current time, as I do think lower prices are ahead, however the 10-day high is at about 6.21, which is around $.50 or $2,500 risk per contract at these price levels, as I would like to see that risk come down and that could happen in the next couple of days.

I have talked about in previous blogs, I’m currently short corn, soybeans, as I do think the grain market will start to rollover due to the fact that the US dollar is hitting a 9-year high once again Thursday as the commodity markets still remain pessimistic, in my opinion. Wheat prices are trading $.40 below their 20-day moving average but still above their 100-day moving average as prices rallied about $2 in two months and now have dropped about $1.00, so we’re trading about mid-range, but it looks to me that a possible retest of the $5 level is in the cards, in my opinion, so take advantage of any rally while maintaining the proper stop loss, risking 2% of your account balance on any given trade.

By Michael Seery of SeeryFutures.com

Related Articles on COMMODITIES