Key Points:
Wheat prices continued their upward trajectory as concerns about dry weather affecting crops in major exporting regions took hold.
The most active wheat contract on the Chicago Board of Trade rose 1.6% to $6.08-3/4 per bushel, marking the highest price since October 3.
Traders in the market noted that farmers were holding back on sales, with expectations of further price increases.
Picture: Wheat futures climb to 5.887, supported by bullish momentum and positive signals from moving averages and MACD, as seen on the VT Markets app.
Wheat futures closed at 5.887, reflecting an increase of 1.06% for the session. The price traded within a range, reaching a high of 5.894 and a low of 5.850.
From this chart, we can see the recent uptrend indicates growing bullish momentum.
The price is currently above the key 5, 10, and 30-period moving averages, which are all aligned positively, suggesting continued upward momentum.
The MACD (12, 26, 9) also supports this outlook, with the MACD line trending above the signal line and increasing positive histogram bars, pointing to strengthening momentum.
Key support is visible around 5.791, a level previously tested during the session. On the upside, resistance is near 5.906, where the price met selling pressure.
A break above this resistance could lead to further gains, while a failure to hold above support could signal a potential pullback.
This price spike is supported by weather challenges faced by key exporters like Argentina and Russia.
The Rosario grains exchange revised its forecast for the 2024/25 Argentine wheat harvest down to 19.5 million metric tons, a reduction from 20.5 million tons.
In Russia, sowing rates have reached an 11-year low, with the Sovecon consultancy highlighting that this could impact the country’s 2025 grain harvest.
Russia, aiming to sow 20 million hectares with winter grain, has so far reached 13 million hectares, but dry conditions are hindering progress.
Looking ahead, traders may continue to focus on weather developments in key wheat-producing regions, and the USDA’s report could shift sentiment around corn and soybean supply.
Wheat prices may remain elevated if production issues persist, while any surprises in the USDA’s data could prompt fresh movements in the soybean and corn markets.
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