Oats fell behind in growth
In this report we would like to present you another trading instrument — oats. Russia, Canada and Australia are its major producers. Oats prices have been falling behind other grains recently. Will their prices continue advancing?
Oat is used to produce all-mash for livestock. Its price may depend not only other grain futures but also on beef and pork. Due to the relatively small volume of global oat market, there is no much data and news on this culture. We may emphasize that now oat is 17% cheaper than it was in early 2016 while corn is just 5% cheaper and wheat is 6% cheaper. The lean hog is being traded at around level of early January 2016.
On the daily chart Oats: D1 failed to fall below its 7-year low hit in early March and started correcting upwards. The MACD and Parabolic indicators give signals to buy. The Bollinger bands have widened a lot which means higher volatility. RSI has left the overbought zone and is below 50, no divergence. The bullish momentum may develop in case the oats surpass the last fractal high at 184. This level may serve the point of entry. The initial stop-loss may be placed below the Parabolic signal, the 7-year low and the last fractal low at 171. Having opened the pending order we shall move the stop to the next fractal low following the Parabolic and Bollinger signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. The most risk-averse traders may switch to the 4-hour chart after the trade and place there a stop-loss moving it in the direction of the trade. If the price meets the stop-loss level at 171 without reaching the order at 184, we recommend cancelling the position: the market sustains internal changes which were not taken into account.
Position Buy
Buy stop above 184
Stop loss below 171
This overview has an informative character and is not financial advice or a recommendation. IFCMarkets. Corp. under any circumstances is not liable for any action taken by someone else after reading this article.
Recommended Content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.