CBOT wheat may retest support at $4.06-1/2

SINGAPORE: CBOT Sept. wheat may retest a support at $4.06-1/2 per bushel, as it could have completed a bounce caused by this level.

For a chart: http://tmsnrt.rs/29PFLTx

The support is provided by the 38.2 percent Fibonacci projection level of a downward wave C, the third wave of a three-wave cycle from the June 8 high of $5.33-3/4.

The bounce from $4.06-1/2 could be broken down into three small waves, with the third wave labelled c having stopped around $4.23-3/4, the 23.6 percent retracement. Such a wave structure suggests the completion of the bounce. The big wave C could have resumed, as it is capable of eventually travelling to $3.78-3/4, the 61.8 percent level.