GM wheat may disrupt the future market 

Brazil recently became the second country in the world after Argentina to approve the cultivation of GM wheat. This resulted in the cessation of hybrid wheat development in North America. Concerns are raised by the National Association of Wheat Growers (NAAWG) over possible declines in U.S. wheat acreage and yield, which could result in less competition for wheat in the United States as well as wheat breeding, which is costly and time-consuming, resulting in less incentive for the public and private sectors in the North American market to jointly invest in research and development.

Among the world's major exporting nations today, either genetically modified varieties of corn or soybeans are cultivated. But in the case of wheat, a plant that is primarily grown for human food, there has been a lack of recent international acceptance to the point that genetically modified wheat from North America was boycotted decades ago. Hence, genetically modified wheat is not currently grown for commercial reasons due to consumer concerns about potential allergens or toxins in staples and baked products used throughout the world.

However, the United States Department of Agriculture (USDA) reports that in the 25 years since GM corn and soybean crops began to grow, farming of such crops increased by 13% and 37%, respectively, in the United States, whereas wheat production declined 37% to a 100-year low in 2020.

Yet, mounting fears of a global food crisis as a result of global wheat supply disruptions, climate change, and the war in Ukraine are prompting wheat breeders to develop cross-species wheat that not only boosts production but also makes the plant more resistant to drought and disease.

Globally, attitudes about GM crops vary. China, for example, has approved the import of GMO seeds for animal feed but has only lately begun to license GMO varieties for planting. Australia, which grows and exports genetically modified cotton and canola, approved biotech wheat for food use in May. In the United States, some wheat producers and industry leaders are interested in adopting biotechnology to boost wheat profitability and offer farmers more incentives. As a result, two trade organizations in the United States, U.S. Wheat Associates and the National Association of Wheat Growers, began to advocate commercial biotech wheat in order to mitigate future wheat market upheavals.

Due to strong overall demand, global wheat supply remains more limited than the previous year, with Russia and Ukraine continuing to dominate the global wheat market. The USDA is expected to publish an increase in US stockpiles as a result of decreasing demand for US wheat exports and raise the outlook for global wheat production.

Wheat futures in Chicago and Kansas City are showing signs of oversold conditions, with the weather still being monitored ahead of this spring's wheat planting season, while drought conditions in certain sections of the US plains have improved slightly but more than half of the region remains afflicted.

Data for Technical Analysis (1H)

Resistance : 696.27, 696.58, 697.10

Support : 695.23, 694.92, 694.40          

1H Outlook

15Min Outlook

Source: Investing.com                                       

Buy/Long 1 If the support at the price range 694.73 - 695.23 is touched, but the support at 695.23 cannot be broken, the TP may be set around 696.27 and the SL around 694.53, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 696.27 - 696.77, TP may be set around 697.05 and SL around 694.00, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 696.27 - 696.77 is touched, but the resistance 696.27 cannot be broken, the TP may be set around 694.90 and the SL around 696.97, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 694.73 - 695.23, TP may be set around 694.40 and SL around 696.27, or up to the risk appetite.       

Pivot Points Mar 08, 2023 03:29AM GMT

Sources: Investing, Brownfield Ag News