Getting technical with commodity market analysis


When farmers talk about commodity markets, the conversation most often focuses on the fundamentals — everything from supply and demand to crop carryover.

Rarely do you stumble upon a conversation where technical market analysis indicators are being hotly contested over coffee. Technical analysis, basically forecasting the direction of prices through the study of past market data, primarily price and volume, “is not ignored, but it’s not talked about as often,” says David Drozd of AgChieve, a grain marketing advisory firm with a 16-year history and clients across the Prairies. “It’s just another way of looking at the market. Charts and technical analysis reading gives you another opinion,” he adds.

“Personally, I can remember as a kid learning more about the technical analysis from my dad and it still is a very interesting unemotional way to view the markets no matter the year or what the fundamentals say,” feels Shaun Haney, RealAgriculture.

In this interview, RealAgriculture’s Shaun Haney and Drozd ‘geek out’ as they discuss how farmers can use technical analysis to take another look at canola, corn, soybean and pulse markets. Along with how to use those it to strengthen their marketing strategy. (Story continues below)

From their favourite technical indicators, including relative strength index (RSI) and moving average convergence divergence (MACD), to comparing the benefits of candlestick, bar and line charts, Haney and Drozd discuss how farmers can use technical indicators to help find price support for canola as it sits at 13-month lows.

Drozd also offers technical tips for marketing spring wheat and discusses how technical analysis factor the frenetic news cycle — from Chinese trade negotiations and Donald Trump tweets — into a market analysis for soybeans.

When it comes to solving and predicting the movement of soybeans, canola, corn and spring wheat there are more than one way to analyze the market.

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