Wheat shows a Buy Signal
Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge and financial resources.
Wheat futures posted strong gains today (2/08) as the U.S. dollar index dropped for a second consecutive session.
Today's rally gives me a fresh buy signal for March wheat on the daily chart. Today's buy signal comes after a few days of consolidation. Wheat also gave me a buy signal on the weekly chart last week (weekly bar ending 2/04) and gave a buy signal in December on the monthly bar chart.
Wheat prices may be finding support from China, the world's largest wheat producer, which is experiencing drought in the North China Plain. The United Nation's Food and Agriculture Organization reports that rainfall has been "substantially" below normal and that snow layers that protect winter wheat crops against frost may be too thin. Wheat production from China's last harvest already dropped from the previous year and if the drought continues into spring the effects may be severe.
With the USDA crop report comes out 7:30AM tomorrow (2/09) morning when the grain markets are closed, I am suggesting to my clients they consider using options as a trading vehicle (Of course options on futures are still speculative in nature and include substantial risk of loss).
Wheat has already suggested to me that it is in a longer-term up-trend. To review what I consider a "long-term trend", watch my new video Larry Baer's Long-Term Trend Confirmation video: http://www.youtube.com/watch?v=tBjFsIdtztw
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Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed.
