Commodity Market : Wheat (June 8, 2023)

Commodity Market : Wheat (June 8, 2023)
Create at 1 year ago (Jun 08, 2023 08:52)

Wheat prices tend to remain stable

In the wheat market, the complex showed mixed movements. Wheat prices were influenced by various factors in the market. The destruction of Ukraine's Nova Kakhovka Dam in areas controlled by Russian forces and lower output in Australia provided support for wheat prices. However, the lack of demand for U.S. wheat shipments exerted downward pressure on prices.

Wheat prices rose 2.4% after a 30-month series of declines as the destruction of the dam in Ukraine led to market fears about the country's ability to ship food to Africa, the Middle East, and parts of Asia. However, the overnight gains were not sustained, although most months closed above the session's lows.

Australia is the world's second largest wheat exporter, primarily to Asian consumers such as China, Indonesia, and Japan. Due to the El Nino weather trend, Australia's wheat production was predicted to fall by more than 30% in 2023-24, supporting wheat prices. While tight competition in the wheat export market limited the rising potential for wheat prices in the United States.

China allocated funds to support wheat harvest activity in Henan province after China's wheat crop faced significant damage due to record heat in early May, followed by torrential rain and flooding. The reports suggested that up to 20% of the country's wheat crop had been affected, leading to quality downgrades.

Since China is both the world's greatest producer and consumer of wheat, a drop in production could lead to a rise in import demand. Chinese processing companies were optimistic about substituting imported wheat for domestically grown wheat in stockfeed diets, as seen by the 80% increase in wheat imports into China in the first four months of 2023. In the fiscal year ending June 2023, China overtook other countries as the largest importer of wheat.

Egypt's General Authority for Supply Commodities (GASC) was reported to have purchased Russian wheat in an international tender, while Russian wheat prices continued to decrease.

Overall, the wheat market is experiencing mixed movements. The destruction of the dam in Ukraine and weather-related issues in China contribute to fluctuations in wheat prices, while competition in the export market and a lack of demand for U.S. wheat influence a lower price trend.

Data for Technical Analysis (1H)

CFD US Wheat Futures - Jul 23 (ZWN3)

Resistance : 616.21, 617.10, 618.53

Support : 613.35, 612.46, 611.03                          

1H Outlook    

Wheat pricesSource:                       

Buy/Long 1 If the support at the price range 611.85 - 613.35 is touched, but the support at 613.35 cannot be broken, the TP may be set around 616.56 and the SL around 611.15, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 616.21 - 617.71, TP may be set around 619.50 and SL around 612.65, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 616.21 - 617.71 is touched, but the resistance 616.21 cannot be broken, the TP may be set around 612.81 and the SL around 618.41, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 611.85 - 613.35, TP may be set around 610.00 and SL around 616.91, or up to the risk appetite.       

Pivot Points Jun 08, 2023 01:27AM GMT

Name S3 S2 S1 Pivot Points R1 R2 R3
Classic 609.06 611.03 612.81 614.78 616.56 618.53 620.31
Fibonacci 611.03 612.46 613.35 614.78 616.21 617.10 618.53
Camarilla 613.57 613.91 614.26 614.78 614.94 615.29 615.63
Woodie's 608.98 610.99 612.73 614.74 616.48 618.49 620.23
DeMark's - - 611.92 614.34 615.67 - -

Sources: SkynewsGRAIN CENTRAL

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