Outlook on Brent crude oil, Chicago wheat and orange juice as People’s Bank of China cuts its one-year medium-term lending facility.
Brent crude oil recovers slightly as top importer China cuts MLF
The Brent crude oil price has risen slightly as the People’s Bank of China unexpectedly lowered its one-year medium-term lending facility (MLF) rates by 15 basis points to 2.50% as it seeks to stimulate China’s economy which faces risks from a deepening property crisis and weak consumer spending.
A possible rise above Monday’s high at $86.35 in the Brent crude oil price would probably engage the 4 August high at $86.55. Further up sits last week’s high at $87.83. The June-to-August uptrend line and Monday’s low at $85.19 is expected to offer at least interim support, if revisited. If not, a deeper correction back towards the early August low at $82.31 may be in store.
Progressing harvest pushes Chicago Wheat prices to a one-month low
Chicago Wheat’s steady decline from its $7.85 late July high has taken it to a one-month low around $6.27. The drop in the wheat price is supported by US plains rain which continues to improve crop prospects and after the US Department of Agriculture boosted its projection of US wheat ending stocks for 2023-24 to 615 million bus at the end of last week.
A drop through $6.27 on a daily chart closing basis would push the psychological $6 mark back to the fore, below which lurks the May low at $5.82. Minor resistance may be encountered around the $6.43 early August low. From a technical perspective while the price of Chicago Wheat remains below last week’s peak at $6.79, the last few weeks’ downtrend remains intact.
Orange juice prices remain capped by the psychological $3 mark
Front month orange juice futures continue to sideways trade below the minor psychological $3.00 mark as they have done since the beginning of August. Monday’s attempt of a break higher seems to have run out of steam at $2.9898. This level and the $3.0000 mark would need to be exceeded for the July high at $3.1075 to come back into play.
While the $3 region continues to cap, the lower end of the August sideways trading range at $2.8723 remains a possible first downside target. Failure there would most likely engage the 55-day simple moving average (SMA) at $2.7508.