Chicago wheat futures price is down 0.55% at $11.6 per bushel on mid-Friday trades.
Wheat prices rose this week on supply constraint, a view bolstered by a US report. According to a report released by the US Department of Agriculture, production in Ukraine, one of the biggest growers, will fall by one-third compared to last year.
Other major producers are battling floods, drought, and heatwaves. The global wheat stockpile is forecasted to reach a 6-year low.
Adverse weather conditions in North America will make farmers abandon the winter wheat plantation because of drought grappling states like Texas and Oklahoma. India has emerged as a major exporter to fill in the supply vacuum left behind by the war in Ukraine. Yet, its stockpiles are forecasted to drop to a five-year low. Also, its production is expected to take a hit as heatwaves will affect harvest.
This foreseeable supply constraint is risking more global food inflation ahead.
On the technical side, the RSI of Chicago wheat futures stood at 65.42 and is currently trading above all SMAs: MA (5), MA (20), and MA (50). So, BUY position can be taken with the following target and stop-loss: