SINGAPORE: CBOT wheat may retrace towards $7.84-1/4 per bushel next quarter after a bounce, following the completion of a wave C.

The completion has been confirmed by the deep drop from the March high of $14.25-1/4, which is near $14.71-1/2, the 100% projection level of the wave C.

Even though this wave a bit falls short of its ultimate target, it is considered over and will be further reversed.

A trend reversal signals appeared as early as in March, when a long-tailed shooting star formed.

Chicago wheat extends gains on demand optimism

The second such pattern showed up in May.

With the big black candlestick almost confirmed in June, market is expected to suffer from further loss in the third quarter.

Whether the wave C extends at a later stage is not the current concern, the main focus is on the depth of the ongoing correction.

A break below $7.84-1/4 could open the way towards $6.22, while a break above $10.46-1/2 could lead to a gain to $12.09.

On the weekly chart, a wave C is unfolding towards its 100% projection level of $8.30-3/4.

But it is doubtful that this wave could fulfil this target effortlessly.

A retracement analysis on the uptrend from $3.59-1/2 reveals a support at $8.92-1/2, the 50% level, which coincides with the 86.4% projection level.

A bounce may occur around this level, which could extend as high as to $10.18.