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WHEAT: Technical Analysis – High global stock estimate bearish for wheat prices

By IFCMarkets

High global stock estimate bearish for wheat prices

Global wheat inventory is expected rise in 2017-18. Will the wheat price continue falling?

The US Department of Agriculture WASDE monthly report upgraded world wheat inventory estimate for 2017-18 by 4.99 million tons to 268.13m tons. The increase was due to higher estimates for major what producers including US, Russia and European Union despite a downgrade for Australia inventory. The increase in US inventory resulted from reduced expectations of use of grain in livestock feed. Higher global stocks are bearish fro wheat prices.


On the daily timeframe WHEAT : D1 is trading with negative bias after retracing higher following the decline from fourteen-month high in mid-January. The 50-day and 200-day moving averages MA(50) and MA(200) have formed a Dead Cross chart pattern, highlighted by the red oval.

We expect the bearish momentum will continue after the price closes below the lower Donchian bound at 436.7. it can be used as an entry point for a pending order to sell. The stop loss can be placed above the last fractal high at 453.2. After placing the pending order the stop loss is to be moved following Parabolic signals. Thus, we are changing the profit/loss ratio to the breakeven point. If the price meets the stop loss level (453.2) without reaching the order (436.7), we recommend cancelling the position: the market sustains internal changes which were not taken into account.

Technical Analysis Summary

Position Sell
Sell stop Below 436.7
Stop loss Above 453.2

Market Analysis provided by IFCMarkets

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About Louie Lewis

Louie Lewis
Successful forex trading starts with you first. Then comes the actual strategies and techniques. I have been involved with forex and forex trading for a few years now. It is a wonderful way to build wealth. The learning never stops and I want to help others along their journey into this wonderful market of opportunity.

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