SINGAPORE: CBOT May wheat may retest a resistance at $6.21-1/2 per bushel, a break above which could lead to a gain to $6.30-1/2.

The contract is riding on a wave c, which is expected to be roughly equal to preceding wave a from the March 31 low of $5.93-1/4.

Even though wheat failed twice to break a falling trendline, the target zone of $6.30-1/2 to $6.37-1/4 remains intact.

A drop below $6.11-1/2, however, will greatly change the technical picture.

Such a drop could signal either the extension of the wave b or the continuation of the downtrend towards $5.95-3/4.

On the daily chart, the current bounce is expected to be matching the one from the Jan. 25 low of $6.26.

That means the bounce may take a few weeks to complete and eventually expand towards a range of $6.43 to $6.54-3/4. Even a drop below $6.07-3/4 won't have a big impact on this bullish outlook, as this drop will probably be limited to $6.

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