Bearish technical action remains present and barring any weather issues, I expect the 50% and 61.8% Fibonacci levels to be challenged. Big picture: The increasing supply outlook globally should accentuate the move lower. Cooler or wetter weather could add bullish short-term spikes, so don't fall asleep at the wheel.
The last five days, July wheat futures have been in the red trading 55 cents lower and also breaking the 50-day MA (blue line) for the first time since late February. I see mild support at the 38.2% Fibonacci level that acted as support in recent months. But is this time different? Like corn, I've suggested using the Fibonacci levels as your objectives.
Large fund positions have started to lighten up so if they all scurry for the doors, don't rule out further unwind to cause additional weakness. Questionable export growth in the coming months is also helping the bears' case.
I know it sounds like a broken record, but use the Fibonacci levels here for guidance on exit as well. With increased South American production and the outlook for record US production and increasing domestic and global ending stocks, the tides appear to be shifting.
