Commodity Market : Wheat (February 29, 2024)

Create at 1 month ago (Feb 29, 2024 10:51)

Global Wheat Prices Drop, U.S. Faces Export Disadvantage

The wheat complex experienced mostly lower prices, due to profit-taking, technical selling, and a strong dollar. Ukraine currently has the world's lowest wheat prices, followed by Russia, putting U.S. wheat at a disadvantage in the export market. The European Union reported a slight decrease in soft wheat exports compared to the same period last year. Brazil's wheat exports for February are projected to be slightly higher than earlier estimates.

The outlook for the 2023/24 U.S. wheat market indicates stable supplies, lower domestic use, unchanged exports, and higher ending stocks. Globally, 2023/24 wheat outlook shows increased supplies, consumption, and trade, but lower ending stocks. Higher production in Iraq and Argentina contributes to increased global supplies, while India's government selling reserves affects consumption. World trade sees higher exports from Ukraine, Argentina, Australia, and Turkey but reduced exports from the United Kingdom and Brazil. Projected global ending stocks are lowered, reaching the lowest level since 2015/16.

U.S. wheat futures closed lower due to strong competition in global export business, particularly from Russia with ample supplies. Improved crop conditions in Kansas and increased exports from Ukraine also contributed to lower overnight wheat futures. Ukraine reported higher grain exports for February compared to the previous year.

Euronext wheat fell due to exiting positions in soon-to-expire front-month futures and large inventories across Europe. UK wheat prices showed signs of bouncing back, influenced by factors such as potential demand pickup.

The International Grains Council reported a continual decline in Russia's milling wheat prices, affecting the global market. Canadian wheat prices also showed declines, with Canada's wheat becoming increasingly competitive in U.S. dollar terms.

Meanwhile, The Ministry of Agriculture in Japan is looking to purchase 92,830 metric tonnes of high-quality wheat from the United States and Canada through a routine tender closing later this week. As the sixth-largest wheat importer globally, Japan closely manages its wheat imports, securing the majority for milling through tenders issued approximately three times a month. This procurement is a crucial aspect of Japan's import strategy for its second-most essential staple, following rice.

In terms of technical analysis, it is expected that wheat prices will trade positively by breaking a key level and hinting at a recovery. The bullish trend is expected to continue, with potential targets at 593.00 and 605.00, but breaking a support level at 578.40 could shift the trend negatively, with targets starting at 550.00. The trading range for this period is anticipated between 575.00 support and 595.00 resistance.

Data for Technical Analysis (30Min) CFD US Wheat Futures - May 24 (ZWK4)

Resistance : 578.88, 579.24, 579.82

Support : 577.72, 577.36, 576.78                              

30Min Outlook

Wheat prices analysisSource:

Buy/Long 1 If the support at the price range 575.72 - 577.72 is touched, but the support at 577.72 cannot be broken, the TP may be set around 579.22 and the SL around 574.72, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 578.88 - 580.88, TP may be set around 581.60 and SL around 576.72, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 578.88 - 580.88 is touched, but the resistance 578.88 cannot be broken, the TP may be set around 577.70 and the SL around 581.88, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 575.72 - 577.72, TP may be set around 574.30 and SL around 579.88, or up to the risk appetite.       

Pivot Points Feb 29, 2024 02:23AM GMT

Pivot Points
Classic 576.18 576.78 577.7 578.3 579.22 579.82 580.74
Fibonacci 576.78 577.36 577.72 578.3 578.88 579.24 579.82
Camarilla 578.2 578.34 578.48 578.3 578.76 578.9 579.04
Woodie's 576.34 576.86 577.86 578.38 579.38 579.9 580.9
DeMark's - - 578 578.45 579.52 - -

Sources: TradingViewProgressive Farmer

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