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This is a follow up article to: Soybeans climb on bargain-buying support
Wheat prices (Symbol: Wheat-C) saw a sharp rise, marking the biggest single-day gain in six weeks. The surge was primarily driven by geopolitical tensions following a Russian missile strike on Ukraine’s Odesa port, a critical hub for grain exports.
Wheat prices surge as Russian attack on Ukraine raises supply concerns, as observed on the VT Markets app.
We see the 5-minute chart for Wheat-C shows a strong upward trend with the price closing at 5.335 after reaching a high of 5.361. The chart highlights a significant price increase from a low of 5.174 earlier in the session, supported by the EMA (24, 24, 72), which indicates bullish momentum.
The MACD histogram shows a strong bullish signal, with the MACD line above the signal line, reflecting increasing buying pressure. This suggests that traders are optimistic about further price increases, with the next key resistance level near the session’s high of 5.361. However, the slight pullback near the close may indicate short-term profit-taking.
This attack has intensified concerns about disruptions to the global wheat supply chain, especially given Ukraine’s significant role as a grain exporter. Wheat prices jumped 1.9%, reflecting the market’s immediate reaction to the potential tightening of supply.
Adding to the bullish momentum in wheat was the news out of France, where the soft wheat crop is expected to be the smallest since the 1980s. The quality of the wheat has also been compromised, with reports indicating mixed milling quality. This further constrains the available supply of high-quality wheat on the global market, pushing prices higher.
Soybeans and corn followed wheat’s upward movement but with less vigour. Soybeans gained 0.4%, driven by bargain-buying after recent declines, while corn inched up by 0.5%. However, these gains were limited by the outlook for large global supplies. The USDA’s forecast of a record U.S. soybean crop, coupled with favourable weather conditions in the Midwest, continues to exert downward pressure on these commodities.
The ongoing conflict in Ukraine is a major factor that could continue to drive volatility in wheat prices. Any further escalations or disruptions to Ukrainian grain exports could send prices soaring. Traders should stay alert to geopolitical developments and be prepared to act quickly as news breaks.
In the case of soybeans and corn, traders should watch for weather-related updates and any new data from the USDA. While the market expects ample supplies, unexpected changes in weather patterns or new reports could shift market sentiment rapidly in the soft commodities market.
Traders may consider taking advantage of short-term price movements by monitoring key agricultural reports and adjusting their positions accordingly.
