Wheat Tech Update
Grain Market Commentary
Wednesday, February 12, 2020
by Risk Management, The Andersons
After a steady and determined rally in SRW futures price the past 5 months, WN20 futures have broken multiple trendlines that have been established over that same period. The market closed below the lowest trendline yesterday, only to hold strong and close above it today. Any close below the lowest trendline is certainly bearish from a technical perspective.
If more downward pressure in price occurs, this could cause the market to find previous support around $5.23-$5.35 range. This is an area the market has seen a lot of, so it could be a psychological stopping point in a downward movement as it searches for equilibrium. We also find ourselves between support and resistance levels in moving averages. Price is trading in the middle of the market’s 50 day moving average and the 100 day moving average. It will be an interesting end of the week to see if buyers step up and keep the trendline intact.
If these support levels are broken, understanding the size of the funds position will be important as they would look to exit previously established long positions, creating even more downward momentum.