Key Points
Chicago wheat futures have gained momentum as concerns mount over dry conditions affecting major global producers, such as Australia, Russia, and the U.S.
Russia, the world’s top wheat exporter, forecasts its total grain harvest to drop to 132 million tons, down from a record 158 million in 2022.
Meanwhile, European wheat exports have also slowed, down 29% from last year. Despite this, steady planting progress in the U.S. has helped temper some of the concerns regarding dry weather.
Picture: Wheat futures edge higher, supported by strong bullish momentum and key moving averages crossing above 5.800, as seen on the VT Markets app.
Wheat futures closed at 5.791, marking a modest rise of 0.68% during the session. The price fluctuated between a high of 5.801 and a low of 5.760, with the upward movement reflecting renewed buying interest after a recent consolidation phase.
The moving averages (5, 10, and 30-period) provide a clear signal of bullish momentum. The price is trading above all three moving averages, with the shorter-term 5-period and 10-period MAs indicating strong short-term upward momentum.
This is further supported by the MACD (12, 26, 9), where the MACD line is trending above the signal line, and positive histogram bars are becoming more pronounced. This suggests that bullish momentum is gaining strength.
Key support is seen near 5.653, which acted as a base for the recent upward rally. As long as the price remains above this level, traders may view pullbacks as potential buying opportunities.
On the upside, resistance is found around 5.803, which aligns with the session’s high. A break above this level could lead to further gains, potentially targeting the 5.850 zone.
Given the strong bullish signals from both the moving averages and the MACD, the market for wheat futures appears poised for further upside, though any failure to break above resistance could result in a brief period of consolidation before the next directional move.
Wheat’s rally has outpaced corn and soybeans, which remain under pressure due to expectations of record U.S. harvests.
Traders are now turning their attention to Friday’s monthly U.S. government crop forecasts.
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Estimates for record yields in both U.S. corn and soybeans could maintain downward pressure on these markets, especially as Brazil anticipates rain to aid planting progress.
Overall, wheat’s price strength could continue if weather-related supply issues persist globally, though U.S. planting progress may moderate gains.
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