Trends in wheat prices

The latest wheat export inspection was 363,826 tons, a rise of 111,345 tons from the week ending April 13 and 74,072 tons from the week ending April 21, 2022, with the Philippines and Taiwan being the top export destinations. Total wheat exports were inspected at 17,865,826 tons for the 2023/24 marketing year, which ends in less than a month and a half, compared to 18,373,296 tons in 2022/23.

According to the USDA's most recent 2022/23 US Wheat Outlook, supply climbed slightly this month, domestic usage declined, exports remained unchanged, and stock volume increased. Higher imports raised supply by 5 million bushels. Meanwhile, domestic wheat consumption fell by 25 million bushels due to decreasing animal feed use.

US wheat exports were constant this month at 775 million bushels, with forecast stocks for 2022/23 increasing by 30 million bushels to 598 million, but still 14% lower than last year, while the 2022/23 season average farm price is projected to be $8.90, a $0.10 decrease per bushel.

The worldwide wheat outlook for 2022/23 predicts increased supply, increased consumption and trade, as well as lower stock levels. Due to significant backlog stocks in Syria and increasing productivity in Ethiopia, supply climbed by 0.7 million tons to 1,061.1 million tons. Global wheat stocks are expected to fall 2.1 million tons to 265.1 million tons in 2022/23, the lowest level since 2015/16. Wheat stocks in India, the Philippines, and Ukraine are likely to decline more than in Syria, the European Union, and the United States.

Food consumption, seed use, higher industrial use in India, including use as animal feed, and residual use in China and the EU all contributed to an increase in global consumption of 2.9 million tons to 796.1 million. Trade in wheat decreased by 1.2 million tons to 212.7 million tons as shipments from the European Union, Argentina, and Brazil were lower than those from Russia and Ukraine, which saw an increase. China's imports of wheat increased by 2.0 million tons to 12.0 million, which is the highest level since 1995/96. This increase was driven primarily by imports from Australia, making China the world's top importer of wheat in 2022/23.

After falling to a 21-month low the day before, the price of wheat futures contracts saw a little price increase due to rain forecast for some US plantations and fiercely competitive Russian exports, which allayed investors' concerns about supply issues.

However, wheat prices, on the other hand, are projected to remain under pressure due to the prospect of sufficient global supply. Regardless of the impact of the Black Sea Grain Initiative or the agreement between Russia and Ukraine for the safe transport of grain and food from Ukrainian ports, which negotiations have yet to be completed after the project began on July 27, 2022, and Russia has agreed to extend the agreement by 120 days for the first two renewals.

Russia insists that the agreement will expire 60 days after the latest renewal, or on May 18, and that negotiations for an extension are still futile. Russia continues to demand that discriminatory limitations on grain and fertilizer exports from Russia be lifted.

Russia is currently projected to harvest a considerable amount this year. Despite the fact that the volume is lower than the record high of 2022. While crop conditions in the EU remain favorable, drought continues to plague Spain and Northern Italy.

More than 25 million tons of grain and food products are shipped from Ukraine under the Black Sea Grain Initiative, which is a major wheat exporter. Of the 27% of total wheat exported from Ukraine, over 65% is exported to developing countries through the program. The United Nations World Food Program has also purchased more than 480,000 tons of wheat via this route to deliver to starvation areas around the world. As a result, wheat prices tend to increase to some extent if demand from China remains high and supply is disrupted by failure to negotiate with Russia.

Data for Technical Analysis (1H)

Resistance : 642.63, 642.93, 643.43

Support : 641.63, 641.33, 640.83          

1H Outlook

15Min Outlook

Source: Investing.com                            

Buy/Long 1 If the support at the price range 641.13 - 641.63 is touched, but the support at 641.63 cannot be broken, the TP may be set around 642.66 and the SL around 640.83, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 642.63 - 643.13, TP may be set around 643.50 and SL around 641.36, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 642.63 - 643.13 is touched, but the resistance 642.63 cannot be broken, the TP may be set around 641.46 and the SL around 643.43, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 641.13 - 641.63, TP may be set around 640.90 and SL around 642.90, or up to the risk appetite.       

Pivot Points Apr 27, 2023 02:05AM GMT

Sources: Successful Farming 1, Successful Farming 2