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CBOT Rice Technical analysis - rise may not continue


The food prices have risen very fast, actually doubled in 6 months period. Rice is certainly among the top performers over 6-month period.

Robert Zolleick's message for a new "Green Revolution" is timely. We basly need to channel our technology and innovation towards global food security.

Technically, it appears that we may have slight relief in Rice prices in coming days. Though it is still early days to call a 'top', the chances of top appears likely. The prices have broken above the Gann angles but with much lower momentum. Hence, unless momentum rises very sharply, this breakout is not likely to hold, and we may drift back into the mid-channel, possibly targeting the lower channel which at present is at around 50% retracement levels. The Doji or what may turn out to be an island formation may also indicate some level of 'top'. The biggest factor would perhaps be warning of Zolleick which has brought the issue to the front pages, this may lead to some players entering (usually weak) and stronger players exiting.

Fundamentally, however the governments are planning to stock up rice for their food security purposes. This would support the prices at even higher levels. The buying for reserves would gain strength as the prices drift down. Hence, we can assume the prices would be up or sustain these levels. The factors similar to crude-oil is being played out.
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