. Daily Commodity Analysis - Copper Prices Struggle Amid Global Wheat Shortage & US Surge

Daily Commodity Analysis – Copper Prices Struggle Amid Global Wheat Shortage & US Surge

Daily Commodity Analysis – Copper Prices Struggle Amid Global Wheat Shortage & US Surge

13 Oct 2023

Introduction:

In the world of wheat, the United States is experiencing a bumper harvest, boasting an extra 85 million bushels in 2023/2024. This surge in production, as revealed by the NASS Small Grains Annual Summary, is reshaping the global wheat landscape. However, the broader picture is not without challenges as global wheat supply faces a 3.5 million-tonne decrease, largely attributed to lower output in Ethiopia, Kazakhstan, and Australia. Despite these global hurdles, US wheat futures are soaring, offering optimism for the wheat market. Meanwhile, in the realm of copper, the industry confronts a scarcity warning from major producers, amidst concerns of clean energy demand outstripping supply. These market dynamics reveal a complex interplay between production, economics, and global forces.

Wheat:

Wheat 2023/2024: US thrives, global challenges ahead.

The United States now has an extra 85 million bushels of wheat available. Higher output, as stated in the NASS Small Grains Annual Summary, is the main cause of this.

There is a 3.5 million tonnes decrease in global wheat supply, or 1,051.0 million tonnes. The main causes of this decline include lower output levels in Ethiopia, Kazakhstan, and Australia. However, these decreases are somewhat countered by increased output in the US.

SRW futures saw double-digit gains, which propelled wheat futures higher at the closing on Thursday. With March back above $6, the front month SRW futures finished 10 ¼ to 15 ½ cents higher. KC futures saw gains of up to 8 cents over the day, closing 1.1% higher. In the end, spring wheat futures increased by 4 to 5 ¼ cents.

Technical Overview :

Moving Averages:

Exponential:

  • MA 5: 593.84| Positive Crossover | Bullish
  • MA 20: 609.86| Negative Crossover | Bearish
  • MA 50: 634.84| Negative Crossover | Bearish

Simple:

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

RSI (Relative Strength Index): 31.05 | Sell Zone | Bearish

Stochastic Oscillator: 33.11| Sell Zone | Positive

Resistance And Support Levels:

  • R1: 623.02 | R2:656.36
  • S1: 593.93| S2: 570.52

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 587.55 | Take Profit: 570.52 | Stop Loss: 601.03.

Copper:

Copper prices rebound after hitting a 4-month low last week.

The biggest producers of copper in the world have issued a warning, stating that there aren’t enough mines being developed to supply enough of the metal to keep up with the switch to clean energy.

The warning comes at a time when miners are facing declining metal prices due to cost inflation and the weakening of the global economy, which makes banks, investors, and executives hesitant to fund new projects.

Prices for copper have decreased by 4% this year to over $8,000 per tonne, from over $10,000 at their peak last year due to a slowdown in global economic growth and an increase in output from new mines in Chile and Peru.

Technical Overview :

Moving Averages:

Exponential:

  • MA 5: 3.59 | Negative Crossover | Bearish
  • MA 20: 3.61 | Negative Crossover | Bearish
  • MA 50: 3.64 | Negative Crossover | Bearish

Simple:

  • MA 5: 3.60 | Negative Crossover | Bearish
  • MA 20: 3.61 | Negative Crossover | Bearish
  • MA 50: 3.64 | Negative Crossover | Bearish

RSI (Relative Strength Index): 44.11 | Neutral Zone | Neutral

Stochastic Oscillator: 10.83| Sell Zone | Negative

Resistance And Support Levels:

  • R1: 3.65 | R2: 3.74
  • S1: 3.58| S2: 3.46

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell : 3.55 | Take Profit: 3.46 | Stop Loss: 3.62.

Elsewhere In the Commodity Market.

Gold price reverse post US-CPI corrective decline jumps to over two-week peak. Silver regains to positive traction on Friday and climbs back closer to a near two-week high. Oil rises $2 as US sanctions; stockpile forecasts raise supply worries.

Gold up (0.96%) at 1886.47, Silver up (1.58%) at 22.14, Palladium down (0.74%) at 1136.00, Platinum up (0.23%) at 870.01, Brent Crude Oil up (3.49%) at 89.00, WTI Crude Oil up (3.58%) at 85.989 as of writing time.

Key Economic Events & Data Release Today:

(EUR) ECB President Lagarde Speaks at 18:30.