WHEAT Analysis: Lower export inspections bearish for wheat prices

By IFCMarkets

Lower export inspections bearish for wheat prices

USDA reported lower wheat export inspections last week and year to date. Will the what price continue declining?

The US Department of Agriculture wheat export inspections, indicating the quantity of grain that has been loaded onto export vessels through Friday of the previous week, was disappointingly low at 12.7 million bushels. And the year-to-date inspections are 62% below last year. Low export loadings signal lower demand for US export wheat. A record crop is forecast in Argentina, one of major wheat exporters in the southern hemisphere. And talk Russian exporters could accelerate shipments this fall to avoid export curbs later in the season due to declining production following complaints from domestic meat producers about the rising cost of animal feed also raises wheat supply increase likelihood. Forecasts of increasing supply and lower export demand are bearish for wheat prices.

On the daily timeframe the WHEAT: D1 is testing the 50-day moving average MA(50).

• The Parabolic indicator gives a sell signal.
• The Donchian channel indicates no trend: it is flat.
• The MACD indicator gives a bearish signal: it is above the signal line and the gap is narrowing.
• The Stochastic oscillator has breached into the oversold zone, this is bullish.

We believe the bearish momentum will continue after the price breaches below the lower boundary of Donchian channel at 537.20. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above the upper Donchian boundary at 588.10. After placing the order, the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss level (588.10) without reaching the order (537.20), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.

Technical Analysis Summary

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