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There is a Lot going on for it to be quick but I’d like to try to address some of the key points as briefly as possible.Originally posted by farmaholic View Post
Without getting bogged down in the fine details, there are a few big picture themes driving price action lately. As I suggested in another thread, years that have smaller crops with production problems tend to put in harvest lows early as the trade begins to accept the difficulties. This year appears to have followed that pattern with the lows of late August, early September holding as harvest or seasonal lows.
The other common theme here is that the grains and oilseeds in general have been working on bottom formations for years now and are trying to find their way out of them.
That brings me to the final theme of the trade war impact. For over two years the trade war between the US and China had been escalating and sellers looked at any rally as an opportunity to be aggressive. On the other hand, buyers would be patient expecting new lows on every move. Now that it appears as through a truce will allow ag commodities to flow again, the psychology has reversed and buyers are becoming more aggressive (with the higher lows) and sellers are not as eager to accommodate (higher highs).
Getting back to the charts, the July Chicago wheat chart had indicators triggering buy signals on the November pullback that have targets at $5.68 initially then $5.81. The recent rally has almost reached those levels but there should be more to come eventually. This is a monthly continuation chart going back to 2010. The saucer bottom developing suggests a move up towards the $7.50 level of resistance if we can get a close above $6.00.
The second chart of Minneapolis Spring Wheat has a large double bottom forming. The measured move on it would be $6.45/bu US on a move above resistance at $5.85. Given it is a much higher quality wheat than the Soft Red Winter traded in Chicago, the mere $.09/bu premium (MWE over ZW) should increase over time. If the above saucer in Chicago wheat works out, so will the double bottom in Minneapolis.
The July Canola chart only shows part of the picture as there has been a year long saucer bottom forming there as well. It has run into resistance at the $497 level but that should fail with a move up to $510 initially then $518/t based on buy signals generated on the early December pullback.
The July Soybean Oil chart provides the fundamental reason for the optimism in the canola analysis. Palm and Soybean oil have been very strong as clearly seen. Farming 101 had recently mentioned the strong crush margins and this shows why. Given the high oil content of canola, there is the clear justification for higher canola prices.
Finally, the July Soybean chart displays the recent action within a fairly wide channel that it has been stuck in (between $9 and $9.80/bu). Given the low oil content of soybeans and the relative weakness of soybean meal, it may have trouble taking out the resistance at $9.80 for now with a pullback more likely in the short term.
Just my opinion, sorry about the length…Comment
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Every other country? Like.... EVERY other country?Originally posted by bucket View Post
Like Australia stealing the water out from under the farmers in the middle of a drought. Or Britain stalling on and on with Brexit to the point it was agriculturally excruciating.
Grass is always greener on the other side but if you talk to any farmer from pretty much any other country you’ll find that agriculture gets the shit end of the stick everywhere. They may be the foundation but as such, they always get used and walked all over.Comment
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