The wheat chart is also reflecting the bearishness of the recent supply enhancements. Chicago March wheat began Sunday night trade appearing to have a head and shoulders chart formation and what looks like a “bear flag” chart pattern, suggesting lower prices ahead. Likewise, the 20-day moving average crossed over the 50-day moving average to the downside. It is this crossover that often signals a trend change. The chart patterns are not an exact science, but wheat is showing some bearish tendencies that could lead to lower values ahead.
January Soybean Meal:
As goes January soybeans, so too goes January soybean meal. The stumbling block for January meal is the $400 per ton level. Just as January soybeans tested and failed to rise above $12.00, so did Jan meal do the same with the $400 level. For 10 straight days, January meal traded near, but could never close above, $400. Also, just like beans, meal embarked on a correction to the downside. In Sunday overnight trade, Jan meal is nearly $16 lower than that magic level.
January meal will probably need to hold above the $375 level to keep the bull run alive. If dry weather returns to central Brazil, the U.S. continues to capitalize on good meal import demand and the Argentine farmer extends his hoarding look for another run at the $400 level, with a close above that leading to a new bullish leg higher.
Comments above are for educational purposes and are not meant to be specific trade recommendations. The buying and selling of grain and soybean futures involve substantial risk and are not suitable for everyone.
Dana Mantini can be reached at email@example.com
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