Drought Conditions Are Pushing Oat Prices Higher. More Upside Is Ahead.
December oats futures (ZOZ25) present a buying opportunity on more price strength.
See on the daily bar chart for December oats futures that prices are trending higher and last week hit a 4.5-month high. See, too, at the bottom of the chart that the moving average convergence divergence (MACD) indicator is in a bullish posture as the red MACD line is above the blue trigger line and both lines are trending up. The bulls have the overall near-term technical advantage.
Fundamentally, better global demand, ongoing supply chain unreliability and less-than-ideal weather patterns in major oats regions, especially drought in the western U.S., are bullish elements for the oats market.
A move in December oats futures prices above chart resistance at last week’s high of $3.76 3/4 would become a buying opportunity. The upside price objective would be $4.00, or above. Technical support, for which to place a protective sell stop just below, is located at last week’s low of $3.64.
IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%):
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On the date of publication, Jim Wyckoff did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.