. Daily Commodity Analysis - Wheat Prices Drop Amid Global Challenges

Daily Commodity Analysis – Wheat Prices Drop Amid Global Challenges

Daily Commodity Analysis – Wheat Prices Drop Amid Global Challenges

01 Nov 2023

Introduction:

In the commodities market, recent developments are affecting various sectors. Wheat futures are on a decline due to competitive export offers from Russia and improved growing conditions in South America. Meanwhile, copper prices continue to dip, impacted by troubling economic data from China, indicating manufacturing sector contraction. Additionally, gold prices are falling amid increasing uncertainty ahead of the Federal Reserve meeting, while crude oil is showing a modest rise in anticipation of significant global central bank meetings. These factors collectively shape the commodities landscape.

Wheat :

Wheat futures falls as export prices stay low.

December wheat futures on the Chicago Board of Trade dropped by 1.4% to $5.58 1/4 per bushel. This decline was in reaction to the competitive wheat export offers emerging from Russia.

Furthermore, recent rainfall in South American growing regions had a negative impact on CBOT grain prices. The precipitation in previously dry areas of Brazil and Argentina is anticipated to alleviate any drought concerns for the developing crops, potentially leading to larger harvests and consequently pushing down export prices.

The USDA is set to unveil its initial assessments of the state of U.S. winter wheat in the upcoming Crop Progress report later today. Analyst Brian Hoops from Midwest Market Solutions anticipates that these conditions will likely be relatively positive.

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): 31.5 | Sell Zone | Bearish

Stochastic Oscillator: 13.55| Sell Zone | Neutral

Resistance And Support Levels:

  • R1: 611.97 | R2: 638.64
  • S1: 593.01| S2: 571.95

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 588.10 | Take Profit: 571.95 | Stop Loss: 599.33.

Copper:

Copper prices dip as China PMI pain continues.

Amidst the realm of industrial metals, copper prices extended their decline on Wednesday, reacting to the release of additional discouraging economic data from China. Copper futures saw a 0.2% drop, settling at $3.6452 per pound.

A private survey of purchasing managers’ indices (PMI) revealed an unexpected contraction in China’s manufacturing sector for October. This reading aligned with a similar downturn reported in a government survey the day prior, underscoring ongoing economic challenges in the world’s foremost copper importer.

The manufacturing industry, a significant driver of Chinese copper demand, is encountering fresh challenges stemming from declining overseas demand, as the economic situations in China’s primary trading partners continue to worsen.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 3.647 | Positive Crossover | Bullish
  • MA 20: 3.629 | Negative Crossover | Bearish
  • MA 50: 3.618 | Negative Crossover | Bearish

Simple:

  • MA 5: 3.645 | Positive Crossover | Bullish
  • MA 20: 3.629 | Negative Crossover | Bearish
  • MA 50: 3.599 | Negative Crossover | Bearish

RSI (Relative Strength Index): 56.37 | Buy Zone | Bullish

Stochastic Oscillator: 55.52| Buy Zone | Neutral

Resistance And Support Levels:

  • R1: 3.696 | R2: 3.784
  • S1: 3.635| S2: 3.534

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell : 3.614 | Take Profit: 3.534 | Stop Loss: 3.670.

Elsewhere In the Commodity Market.

On Wednesday, gold prices declined further amid rising uncertainty in anticipation of the conclusion of a Federal Reserve meeting. Crude oil prices experienced a slight uptick on Wednesday, as investors looked ahead to significant central bank meetings on a global scale.

Gold down (0.0%) at 1983.51, Silver down (0.81%) at 22.66, Palladium down (0.34%) at 1119.42, Platinum down (0.88%) at 925.29, Brent Crude Oil up (1.29%) at 86.12, WTI Crude Oil up (1.38%) at 82.10 as of writing time.

Key Economic Events & Data Release Today:

(USD) ADP Nonfarm Employment Change (Oct) Forecast 150K, Previous 89K at 17:45.

(USD) ISM Manufacturing PMI (Oct) Forecast 49.0, Previous 49.0 at 19:30.

(USD) Fed Interest Rate Decision at 23:30.

(USD) FOMC Statement at 23:30.