CBOT wheat may rise towards $7.32 in Q4

SINGAPORE: CBOT wheat may rise towards $7.32 per bushel this quarter, as it has broken a resistance at $5.89-1/2.

The resistance is identified as the 23.6pc retracement of the downtrend from $13.34-1/2 to $3.59-1/2.

The next resistance will be at $7.32.

Wave pattern suggests the progress of a wave c, the third wave of a bigger wave C.

This wave c is the fiercest one among all the waves of the uptrend from $3.59-1/2.

The break above $5.89-1/2 looks convincing, after three failed attempts in Aug. 2018, Jan. and March 2020.

In the case of a false break, the correction may be limited to $5.60-1/2, the 61.8pc projection level of the wave C.

This projection analysis reveals a resistance at $6.49-3/4, which is pointed by a short trendline.

The resistance is highly likely to trigger a pullback towards $5.89-1/2.

This pullback could be the only decent correction until corn rises to $7.32.

A closer look at the daily chart reveals lower and weaker resistances.

The immediate resistance is at $6.03, the 76.4pc projection level of the wave c from $4.68-1/4.

There is no obvious signal of a correction around this barrier, even though the contract failed to break this level on Oct. 6.

Such a correction may be limited to $5.77.

A further drop, however, could end around $5.56-1/2.