Wheat prices exploded yesterday with limit gains seen at times during the day in Chicago and Kansas City.
Today we did try to fill the gap early when prices were sharply lower, but prices did turn around and closed higher again with KC wheat posting a new contract high at 13.79.
There is no sign of a topping action following todays strong lose but with prices exploding to new contract highs and technical indicators extremely over bought this is the place to exercise some caution.
Wheat prices made a new high for the move up to 12.07 on the July chart.
We took out the high posted from April and that puts 12.59 as the next target and unless we get bearish news, we wouldn’t be surprised to see the market working in that direction in the next few weeks.