Technical analysis: Will the rice price advance continue?

Dmitry Lukashov IFC Markets

Rough rice technical analysis

The RICE: D1 maintained the uptrend and has exited a bullish flag. A number of technical analysis indicators formed signals for further advance. We do not rule out a bullish movement if RICE: D1 rises above the last two fractal highs at 17.55. This level can be used as an entry point for an order to buy. The stop loss can be placed below the Parabolic SAR, the moving average MA(200),the four last fractal lows and the lower Bollinger band at 15.95. After placing a pending order, the stop loss is to be moved following the Bollinger and Parabolic signals to the next fractal low. Thus, we change the potential profit/loss ratio in our favor. The most cautious traders, after making a trade, can switch to a four-hour chart and set a stop loss, moving it in the direction of movement. If the price meets the stop loss level (15.95) without activating the order (17.55), it is recommended to delete the order: there are internal changes in the market that were not taken into account.

Fundamental analysis of commodities - Rough rice

A drought has set in several regions in India. Will the RICE price advance continue?

A shortage of rainfall has been recorded in Bihar, Jharkhand, West Bengal и Uttar Pradesh. Rice plantations have fallen by 13.3% to 3-year low this year against that background. This may result in the decline in rice crop by 10 million tons or 8% over last year’s crop, according to All India Rice Exporters Association. It should be noted that India accounts for the third of global rice exports. U.N. Food and Agriculture Organization recorded worsening of weather condition for rice cultivation not only in India but also in Bangladesh, China and Vietnam. Earlier U.S. Department of Agriculture (USDA) forecast rice production decline in Europe for 2022/2023 season to 1995/1996 season low due to draught in Italy and Spain. The 2022/2023 global rice production will reach 514.8 million tons according to USDA. The global consumption will exceed that and will be 518.6 million tons. Because of that global rice stocks may decline for third season in a row – to 182.8 million tons. These factors may theoretically support rice price.

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Author

Dmitry Lukashov

IFC Markets

Dimtry Lukashov is the senior analyst of IFC Markets. He started his professional career in the financial market as a trader interested in stocks and obligations.

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