Technical Analysis #C-WHEAT : 2019-06-28

Lower Canadian crop estimate bullish for wheat

Wheat production estimate was lowered in Canada’s Principal field crop areas report. Will the wheat prices continue rising?

Statistics Canada reported wheat plantings at 24.595 million acres on June 26, down 0.6% from 2018. This area is below a prior estimate of 25-26 million acres. Canada is world’s seventh top wheat producer, and what is more important the second biggest wheat exporter: Canada exported $5.7 billion worth of wheat during 2018, accounting for 14.2% of global wheat exports in 2018. Lower Canadian wheat production estimate is bullish for wheat.

WHEAT is falling below MA(50) 04/11/2019 Technical Analysis IFC Markets chart

On the daily timeframe the WEHAT: D1 is above the 200-day moving average MA(200), this is bullish.

  • The Parabolic indicator gives a buy signal.
  • The Donchian channel indicates no trend yet: it is flat.
  • The MACD indicator gives a bearish signal: it is above the signal line and the gap is narrowing.
  • The RSI oscillator has levelled off and has not reached the oversold zone yet.

We believe the bullish momentum will continue after the price breaches above the upper boundary of Donchian channel at 556.1. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below the last fractal low at 517.5. After placing the order, the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop loss level (517.5) without reaching the order (556.1), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.

Technical Analysis Summary

OrderBuy
Buy stop Above 556.1
Stop loss Below 517.5

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