CBOT wheat to drop to $6.96/bushel

SINGAPORE: CBOT Sept wheat is exhausted in its rally before a resistance zone of $7.20-$7.26 per bushel and is expected to fall to $6.96.

The zone was formed by a descending trendline resistance and the 61.8 percent Fibonacci projection level of a wave "c" target, and in the past three trading sessions, the contract came close to this zone but failed to stand above it.

An ascending trendline works together with the descending trendline to squeeze wheat out of a small consolidation range of $7.09-$7.18, swinging the balance between the bulls and the bears to the bearish side.

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Copyright Reuters, 2011