December Wheat Futures Building A Base

December wheat futures ability to post an upside closing price reversal in the face of a negative USDA report for beans and corn was a positive development. The August low at 4.22 remains intact as base building to confirm a seasonal low continues. Today's push above last week's high of 4.48 is an attempt at a breakout of a small 1,2,3 bottoming formation which is another positive move. The next upside resistance appears at a 24% retracement objective of 4.62 followed by a 38% retracement objective at 4.87. Even though the overall technical condition of this market remains negative, the near term momentum continues to lean to the upside for a recovery event to unfold. If for some reason the upward push fails, the market has support beginning at the 18 DMA of 4.36 followed by the August low of 4.22. A long call option strategy is a low risk method to capitalize on potentially further upside movement.