This close beneath the 9 day EMA will likely prompt a re-test towards the 48.00 support level. A take out of this level will see a move towards the bottom of the long term trend channel which is currently around 44.50.
A sustained period above this channel is needed to negate the current down trend channel as well as open an opportunity for a break above 51. This is a low probability outcome right now given the weakness associated with the Dec delivery.
ECOM Weekly China market recap Chinese domestic prices have actually leveled out and improved in some instances over the past week, as despite the massive crop on the way in, cash traders see good value at current prices both in the cash markets as well as the derivative markets.
US futures stability has also bred some confidence in the Chinese domestic markets, along with the prospect that TRQ import quotas are a progressively later event than originally anticipated.
This week's USDA increase in Chinese production of 1mio bales was largely anticipated, especially after the SSB moved into a 6.46 MMT estimate. The USDA estimate is now the equivalent of 6.525 MMT.
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