Key points:
Chicago wheat prices remained largely unchanged on Wednesday, hovering around $5.74-1/4 per bushel, as ample supplies from the Black Sea region continued to weigh on the market.
Corn also stayed flat at $4.04-1/4 per bushel, with traders squaring positions ahead of key crop estimates expected later this week.
See: Wheat prices steady, trading at 5.504 as seen on the VT Markets app.
We look to the charts. Wheat futures have encountered resistance despite an uptick, closing at 5.492 after reaching a high of 5.501. The 1-hour chart shows the price capped by the 5.552 resistance level, a point where it has struggled to break out in previous sessions.
The MACD remains in positive territory, signalling potential bullish momentum, though the histogram is narrowing, indicating that this momentum could be waning. The price remains supported by the 5, 10, and 30-period moving averages, which could offer some near-term support.
One of the key factors limiting upside potential in the wheat markets is the continued competitiveness of Black Sea wheat exports. Their lower pricing has kept CBOT wheat contracts under pressure, preventing the market from fully capitalising on global weather concerns and potential crop yield reductions. If the resistance at 5.552 is not breached soon, we may see a consolidation around the 5.500 level or a potential pullback towards the 5.450 mark.
In the absence of a fundamental shift, such as a disruption in Black Sea exports or a sudden change in weather conditions affecting crop yields, the wheat market is likely to remain range-bound. Traders are carefully watching the upcoming crop estimates to assess any potential changes in U.S. wheat supply outlooks.
Perhaps also notable is that European Union wheat exports have slowed, with data from the European Commission showing soft wheat exports down 23% year-on-year, reaching 4.82 million metric tons by September 8th, compared to 6.25 million metric tons last year.
This adds another layer of caution for wheat traders, who expect continued price pressure unless Black Sea exports ease.
Soybean prices edged up 0.2% to $9.98-3/4 per bushel after remaining flat in the previous session. The market saw some support from the U.S. Department of Agriculture’s (USDA) latest crop progress report, which kept the soybean crop’s good-to-excellent rating steady at 65%. This surprised some traders, as expectations were for a slight decline.
Analysts anticipate the USDA will leave its U.S. soybean yield forecast unchanged at 53.2 bushels per acre in Thursday’s report. Estimates range from 52 to 54.9 bushels, indicating some level of uncertainty about potential yield outcomes. The corn yield estimate is expected to see a slight reduction, adding another dynamic to the grain market outlook.
Commodity funds were active in the futures market on Tuesday, being net sellers of soybean, corn, soymeal, and soyoil contracts while acting as net buyers of wheat futures. The broader market showed mixed performance, with the S&P 500 and Nasdaq posting gains, while Brent crude prices hit a 3-1/2-year low amid concerns about global demand.
Traders are now shifting their focus toward Thursday’s monthly crop estimates and key inflation data, which could have a broader impact on the commodities landscape.
You might be interested: Wheat and soybean retreat as supply issues loom
Wheat prices may remain subdued in the near term unless there is a significant shift in Black Sea exports or U.S. crop estimates provide unexpected bullish support. Meanwhile, soybeans could continue to rise modestly if crop ratings hold steady or improve. The upcoming USDA report will play a crucial role in determining the next moves in both markets.
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