Wheat Prices Climb as Global Supply Tightens, U.S. Planting Nears Completion

Wheat markets saw a price uptick on Wednesday, breaking a recent downtrend, with 64% of U.S. winter wheat planting completed—an average rate for this time of year. Forecasted rain in the Western and Southern Plains is much needed, but planting success will depend on adequate rainfall post-dormancy.

In the U.S., wheat supplies for 2024/25 are projected lower, with slightly higher domestic use, steady exports, and a decrease in ending stocks to 812 million bushels, up 17% from last year. Global wheat supplies are also down due to reduced production in the EU, Russia, India, and Brazil, only partly offset by higher Ukrainian output and increased Russian stocks. Global consumption is expected to fall, particularly in India and Afghanistan, while trade is also reduced due to lower EU exports, though Ukrainian exports are increasing.

In Ukraine, strong demand from Asia has raised wheat prices to about $210 per ton, with potential growth to $220 as supply remains limited. The government capped 2024/25 wheat exports at 16.2 million tons to secure domestic needs, with 6.89 million tons already exported as of October 14. Georgia, heavily reliant on Russian wheat (over 95%), affirmed its readiness to shift to alternative suppliers like Kazakhstan and Ukraine if Russian supplies are disrupted.

India, the world’s second-largest wheat producer, raised its minimum wheat purchase price by 150 rupees per 100 kg (a 6.6% increase) for 2025-26 to encourage local production amid high domestic prices and limited wheat stocks.

From January to September 2024, Azerbaijan imported 758,956 tons of wheat, worth $166.45 million, which represents a 4.2% decrease in volume and a 21% drop in cost compared to the same period in 2023. The average price per ton of wheat fell from $266 in 2023 to $219 in 2024, marking an 18% decrease. Wheat imports comprised 1.14% of Azerbaijan's total import expenses.

In Euronext's wheat futures and options, non-commercial market participants, like investment funds, increased their net short position to 61,028 contracts by October 11, while commercial participants slightly reduced their net long positions.

On Wednesday, wheat prices rose across exchanges: Chicago SRW, Kansas City HRW, and Minneapolis spring wheat each saw gains. Chicago Board of Trade wheat futures rose on concerns over Argentina's wheat crop due to strong polar winds and increased Ukrainian grain exports. Russia’s rain-drenched regions limited further wheat price gains.

Data for Technical Analysis (1H) CFD US Wheat Futures - Dec 24 (ZWZ4)

Resistance : 588.01, 588.85, 590.19

Support : 585.33, 584.49, 583.15   

1H Outlook

Source: TradingView

Buy/Long 1 If the support at the price range 583.33 - 585.33 is touched, but the support at 585.33 cannot be broken, the TP may be set around 588.24 and the SL around 582.33, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 588.01 - 590.01, TP may be set around 594.00 and SL around 584.33, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 588.01 - 590.01 is touched, but the resistance 588.01 cannot be broken, the TP may be set around 584.72 and the SL around 591.01, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 583.33 - 585.33, TP may be set around 578.00 and SL around 589.00, or up to the risk appetite.       

Pivot Points Oct 17, 2024 03:06AM GMT