Wheat continues to see bullish pressure Wednesday, as the markets are pricing in poor weather in the USA, as well as Australia. That being said, oil prices are also a concern, with the Straight of Hormuz and fertilizer an issue also.
Wheat
Wheat continues to see bullish pressure on Wednesday as we continue to see the wheat market break out of what had been a significant previous consolidation area. Up roughly 10% over the last 2 weeks, we've seen acceleration due to concerns about weather and perhaps poor yield.
Furthermore, we have to worry about the exacerbation of poor yield due to the Strait of Hormuz closure which of course is a major gateway for fertilizer around the world. With this being said, I look at the chart and see the 640 level as a potential support level and then below there, the 600 level.
The Potential Move Toward 700
I do think that given enough time we may go looking to the 700 level, but it's probably going to be a noisy move all the way up there. After all, this is a market that I think continues to look as a grinding market overall, but these latest concerns about wheat yield as the weather in Australia and of course US wheat regions continue to be a major issue.
The rising crude oil prices linked to the war of course have an influence on some of the transportation and farming of wheat. So, all things combined seem to be pushing for higher prices. I do think that we're a little overdone and maybe waiting on some type of value might be the way forward, but as things stand right now, this is a market that I cannot short. The 50-day EMA is at 593 and rising, perhaps solidifying the 600 floor if we do in fact get anywhere near there. I don't know that we do, and I do think that the trend would be defined by whether or not we can stay above.