Wheat prices remain pressured by sluggish demand and oversupply

According to the USDA, wheat export inspections for the 2022/23 marketing year for the week of March 30 were 168,543 metric tons, down 235,310 tons from the previous week and 149,761 tons from the same week last year. The primary export destinations are the Philippines and Ethiopia, with the current marketing year's Q4 wheat export inspection standing at 16,859,451 tons, compared to 17,218,132 tons in 2021/22.

There is no discernible pattern in the price of most wheat futures. Profit-taking and technical selling have recently caused the price to fall slightly. Wheat prices are predicted to remain in the overbought area and to fall further.

Droughts, planting delays, snowstorms, and flooding from melting ice continue to be major issues in plantations in the southern and northern United States and Canada, with Russia and a portion of Australia also dominating the wheat export market, while Ukraine continues to export less due to Russian aggression and delays in inspections of shipping ships leaving the Black Sea. Meanwhile, due to increased domestic trade competition, certain Eastern European nations are still requesting that the European Commission renew tariffs on Ukrainian grain imports.

However, according to the recently released USDA Prospective Plantings Report, wheat planting in the United States is expected to increase this year. Wheat acreage is predicted to be 49.9 million acres in 2023, up 9% from 2022 and higher than the USDA projection of 49.5 million acres issued in February.

Quarterly wheat stocks in the United States were 946 million bushels, up from an export projection of 934 million bushels but down 8% from a year ago.

Meanwhile, wheat prices in Russia have fallen to their lowest level since 2019, with the average price of grade 3 wheat in Russia falling to 11,550 rubles ($147) a ton as of March 29, the lowest level since November 2019 due to an ample supply of wheat and decreased export demand.

As of March 1, commercial enterprises in Russia held up to 17.4 million tons of wheat, 82% more than the five-year average, while the average FOB wheat price in Russia was estimated by SovEcon, a Black Sea agricultural market research company, at around $279 per ton, which is the lowest price since August 2021.

Data for Technical Analysis (1H) 

Resistance : 680.75, 681.41, 682.47

Support : 678.63, 677.97, 676.91

1H Outlook

Source: Investing.com  

Buy/Long 1 If the support at the price range 678.13 - 678.63 is touched, but the support at 678.63 cannot be broken, the TP may be set around 680.78 and the SL around 677.93, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 680.75 - 681.25, TP may be set around 682.00 and SL around 678.30, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 680.75 - 681.25 is touched, but the resistance 680.75 cannot be broken, the TP may be set around 678.20 and the SL around 681.45, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 678.13 - 678.63, TP may be set around 677.30 and SL around 681.00, or up to the risk appetite.       

Pivot Points Apr 06, 2023 03:15AM GMT

Sources: Brownfield Ag News, Successful Farming