SINGAPORE: CBOT wheat could test resistance at $8.01-3/4 after its failure to break support at $7.65-1/2 per bushel.

The failure coincides with bullish divergence on the hourly RSI.

Together they suggest the formation of a bottom around $7.65-1/2.

A further bounce is highly likely after the downtrend has become exhausted.

Global wheat prices reach record levels

A break above $8.01-3/4 could prompt a gain into a range of $8.24 to $8.60-1/4. A break below $7.65-1/2 could open the way towards a range of $7.07-1/4 to $7.36-1/2.

On the daily chart, the contract opened sharply higher on Monday after the big black candlestick appeared on Friday.

Bears seemed to be bluffing within a contracting wedge, which could turn out to be a bottom pattern.