Chicago wheat futures price is down 0.12% at $10.6 per bushel on mid-Friday trades.
Wheat opened this week on a bearish note and continued trading within a range. It is poised for a third straight monthly gain as tightening global supplies after Russia’s invasion of Ukraine underpinned prices. The invasion has also curbed wheat exports from the Black Sea region, a key supplier.
To lessen the supply constraint and associated inflation with rising food prices, the Biden administration is asking Congress to approve $500 million for the farm sector, in a bid to woo U.S. wheat producers to double-crop their fields.
With Russia and Ukraine accounting for nearly one-third of the global wheat exports, the conflict has further exacerbated the global food security which has been reeling under the COVID-19 pandemic. With soaring energy prices and food prices, global inflation has attained a new record-level high.
The Northern African region and the Middle Eastern countries are the main importers of Russian and Ukrainian wheat. Egypt, the Arab world’s most populous country, alone imports 80% of its wheat from Ukraine and Russia. Many security analysts have cautioned about riots, famine, mass migration, and conflict emerging in these regions. High food price was an unlikely cause for the start of the Arab Spring.
On the technical side, the RSI of Chicago wheat futures stood at 52 and is currently trading below MA (5) but above MA (20) and MA (50). So, BUY position can be taken with the following target and stop-loss: