Focus: September Rice
My July 20th grain report featured a bullish outlook for rough rice which had recently penetrated above the resistance line of a triangle pattern (blue dashed lines). September rice subsequently advanced over $1.00 and set a high of $14.06 on Aug. 10. Prices then fell and closed at $13.12 last Friday, testing the support level established by the June swing high (red dashed line). The recent price retracement is occurring on a weak ADX (<25) relative to the ADX strength (>25) of the Aug. 10 high. This usually indicates that prices will find support. Monday, the USDA will issue its report on weekly crop progress which could fuel increased demand and help prices rebound to test the August high.
Chart Courtesy of TradeStation
Dr. Charles B. Schaap is the author of ADXcellence—Power Trend Strategies and Invest with Success—Big Profits for Small Investors. Dr. Schaap is a commodity futures strategist and recognized authority in technical analysis of the financial markets. His website is www.adxcellence.com.