. Daily Commodity Analysis - China's Wheat Purchase Boosts Prices

Daily Commodity Analysis – China’s Wheat Purchase Boosts Prices

Daily Commodity Analysis – China’s Wheat Purchase Boosts Prices

04 Oct 2023

Introduction:

In the commodities market, wheat futures surge as China confirms a substantial purchase, while gold remains at a multi-month low amidst bearish sentiments. Additionally, oil faces a $1 drop due to demand concerns and Saudi Arabia’s confirmation of year-end cuts.

Wheat:

Wheat futures rise after China confirms flash purchase.

Tuesday saw a 0.7% increase in the price of wheat for December delivery on the Chicago Board of Trade thanks to traders being encouraged by the USDA’s confirmation of a quick sale of American wheat to China.

This morning, the USDA announced a rapid sale of 220,000 metric tons of soft red wheat to China for delivery in 2023–2024. Trading participants were surprised by the new acquisition, which supported wheat futures today. “The rumours of Chinese interest in soft red wheat appear to be true,” wrote Charlie Serna Tinger of Marex in a note. A shipment of American spring wheat may have been sold to China this week, according to claims that surfaced today. The transaction is viewed as proof that American wheat is now finally priced competitively on a global scale.

Technical Overview :

Moving Averages:

Exponential:

  • MA 5: 593.84| Negative Crossover | Bearish
  • MA 20: 609.86 | Negative Crossover | Bearish
  • MA 50: 636.84| Negative Crossover | Bearish

Simple:

  • MA 5: 592.25 | Negative Crossover | Bearish
  • MA 20: 611.78| Negative Crossover | Bearish
  • MA 50: 642.87 | Negative Crossover | Bearish

RSI (Relative Strength Index): 31.5 | Selling Zone | Bearish

Stochastic Oscillator: 33.11| Selling Zone | Positive

Resistance And Support Levels:

  • R1: 611.67 | R2: 641.46
  • S1: 592.51| S2: 571.23

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 584.71 | Take Profit: 571.23 | Stop Loss: 594.64.

Gold:

Gold price remains pinned near a multi-month low, bearish potential seems intact.

The price of gold continues to move in a consolidative direction through the first part of the European trading session on Wednesday and is confined to a small trading range just above a nearly seven-month low hit the day before.

In the first part of the European session on Wednesday, the price of gold (XAU/USD) continues to move in a consolidative manner and is constrained to a small trading range that is just above the nearly seven-month low reached the day before. Meanwhile, the absence of any buying activity shows that the recent decline observed over the past two weeks or so is still very much ongoing. The rising US Treasury bond yields and underlying strong sentiment around the US Dollar (USD) are still supported by the Federal Reserve’s (Fed) hawkish view, reinforcing the unfavorable forecast for the non-yielding yellow metal.

Technical Overview :

Moving Averages:

Exponential:

  • MA 5: 1825.00 | Negative Crossover | Bearish
  • MA 20: 1851.48 | Negative Crossover | Bearish
  • MA 50: 1881.41 | Negative Crossover | Bearish

Simple:

  • MA 5: 1822.79 | Negative Crossover | Bearish
  • MA 20: 1853.80 | Negative Crossover | Bearish
  • MA 50: 1894.62 | Negative Crossover | Bearish

RSI (Relative Strength Index): 19.22 | Sell Zone | Bearish

Stochastic Oscillator: 30.42| Sell Zone | Positive

Resistance And Support Levels:

  • R1: 1833.53 | R2: 1858.80
  • S1: 1814.47| S2: 1786.12

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1806.09 | Take Profit: 1786.12 | Stop Loss: 1821.97.

Elsewhere In the Commodity Market.

Oil falls $1 on demand fears, Saudi confirms cuts to yearend. Silver futures continued their downward trend for the seventh consecutive day on Wednesday.

Gold down (0.01%) at 1822.67, Silver down (0.38%) at 21.08, Palladium down (1.06%) at 1161.50, Platinum down (0.46%) at 867.00, Brent Crude Oil down (0.96%) at 90.03, WTI Crude Oil down (1.11%) at 88.24 as of writing time.

Key Economic Events & Data Release Today:

(EUR) ECB President Lagarde Speaks at 13:30.  

(USD) Crude Oil Inventories Forecast –0.446M, Previous –2.170M at 20:00.