Daily Wheat chart CBOT - July 2014

Wheat Futures Plunge Leaves No Trade

We’ve been following Wheat futures since a new 12-month high of 744 was reached on May 6th (see previous post:  New 12 Month High in Wheat Futures).

We waited for a 123 top formation, but instead prices tumbled almost straight down over the past 11 trading sessions (see Daily Wheat chart below).  At the time of this post, July Wheat futures are around 656 and the 50% Retracement Level is at 650.63, so that doesn’t leave much room for profit given that we look to make the difference between the #2 point and the 50% Retracement.  Since there was no discernible 123 top to signal a change in market direction, we missed the ride down and and we don’t see an opportunity to trade this market at this time.  Stay tuned.

Daily Wheat chart CBOT - July 2014

Weekly Wheat CBOT

New 12 Month High in Wheat Futures

The last time wheat prices were this high was back on 3/29/13 when prices reached 741.75. Today, July Wheat futures reached 744, making a new 12-month high. See the Daily Wheat chart and the Weekly Wheat chart below which show the new high and the previous high respectively.

We will watch the wheat market over the next few days to see if a 123 top formation gels in which case we will short wheat futures.

Daily Wheat CBOT - July 2014Weekly Wheat CBOT

Selling Our Wheat Call Option at 559% Profit

May Wheat Futures spiked yesterday to close at 715.75 and moved a litter higher this morning to 723.50 before coming down a little (at the time of this post).  We have been long May Wheat with a 605 Call Option we purchased back on February 12th for $862.00 and today we sold this Call option for $5681.25.   Even though our target was the 50% Retracement level (on the Weekly chart) of 748.74 (see our previous post:  Wheat Futures Prices Spiked Today), we decided to pocket the profits now instead of waiting.

We made a net profit on this trade of $4819.25.   That’s a 559% ROI in a little over 1 month!

Wheat Futures Prices Spiked Today

We are long May Wheat with our 605 Call option we paid $862 for.  May Wheat futures spiked to 644.50 before closing at 631.50 today.  The 50% Retracement level on the Daily May Wheat chart was 635.38 which was surpassed today.  Our next target is the 50% Retracement level on the Weekly Wheat chart of 748.74 (see our previous post:  Going Long Wheat Futures on Breakout)

Our 605 May Call option closed today worth $2193.75  If we were to sell this option now, we would profit $2193.75 – $862 (cost) = $1331.72 net profit.   That’s 154% ROI.  Since we still have time on this option (it doesn’t expire until 4/25/14) and there is still a lot of upside potential, we are going to hold this option a little longer.

Going Long Wheat Futures on Breakout

Today (February 12, 2014) Wheat Futures broke above the #2 point of 592.75 in the 1-2-3 Bottom Formation shown in the Daily Wheat chart below.  The #1 point is a multiyear low.  As of this writing, prices for the day have gone as high as 597.75 before coming back down to 589.25.

We are going long Wheat by buying a May 2014 Call option at a 605 strike price (3 strike prices out of the money) for $862.  This option expires on 4/25/204.  The 50% Retracement Level on the Daily Wheat chart is 635.38 and the 50% Retracement Level on the Weekly Wheat chart is 748.74 so this trade has plenty of upside profit potential.

Daily Wheat CBOT - March 2014Weekly Wheat CBOT

New 12-Month Low in Wheat Futures

The Weekly Wheat (CBOT) chart below shows that Wheat has made a new 12-month low.  Looking at the Daily Wheat chart for March 2014 wheat futures, we have a possible #1 point of a 1-2-3 bottom forming at 621.  As of this morning (12/17/13) the Intraday chart shows wheat has gone even lower to 620.25 (at the time of this post).  We will watch for the #2 and #3 points to form before going long wheat.

Daily Wheat CBOT - March 2014

Weekly Wheat CBOT

New Multiyear Low in Wheat – Wait For 1-2-3 Bottom Formation

As can be seen in the Monthly and Weekly Wheat charts below, Hard Red Spring Wheat has hit a multiyear low.   We are going to wait and see if this current #1 point of a 1-2-3 bottom formation shapes up (with the formation of a #2 point) or if wheat is headed even lower.   There is huge upside potential since the 50% retracement level in the Weekly Wheat Chart is at 849.  Even on the Daily Wheat Chart, the 50% retracement (from its current low) is 721.25 which gives us plenty of upside potential on this long trade in wheat.

Daily Wheat - March2014

Monthly Wheat Weekly Wheat