CBOT wheat to fall towards $3.59-1/2 to $4.28-1/2 range in Q4

CBOT wheat (Wc1) is poised to break support at $4.93-3/4 per bushel in the fourth quarter and fall towards the $3.59-1/2 to $4.28-1/2 range.

The contract is making its fourth attempt to break the support. Considering that the bounce triggered by the support became weaker and weaker, the market may soon break below the level.

A wave E from the May 2024 high of $7.20 is unfolding. It is capable of travelling to $3.59-1/2, assuming that it is roughly equal to the wave A from $13.48.

Three smaller waves make up the wave E. The current wave c may be as long as the wave a, to travel toward $3.59-1/2. The break below $4.93-3/4 will be confirmed once the market closes below $4.90.

On the daily chart, a detailed study on the structure of the wave E reveals nearest target of $4.69, the 61.8% projection level of the small wave c, assuming the latter turns out to be very weak.

A stronger wave c would be able to extend to $3.82-1/2. It is highly likely to fulfil this target, as it makes the third leg of a zigzag pattern from $7.20.

The pattern is characterised by the equality of its wave c to its wave a. This target of $3.82-1/2 will be available when the market breaks $4.69. A break above $5.22-1/4 may lead to a gain into $5.55-1/2 to $5.75-3/4 range.

* 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.