The correction takes the shape of a flat, which consists of three waves that are roughly equal in length. The third wave labelled c is a bit shorter than the preceding two waves. This relation is acceptable.
The slow recovery of the price from the April 10 low of $4.55-1/2 confirms the completion of the correction. On the daily chart, wheat found a support at $4.56-1/2, the 14.6 percent retracement on the downtrend from $6.30-1/4 to $4.27.
The consolidation triggered by the resistance at $4.74-3/4 may have ended around the support. The contract is poised to retest this resistance.
A break below $4.56-1/2 could cause a loss to $4.41.
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** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.