Large wheat remnants from the old harvest limit the potential for price growth

The world wheat market operated in a weather premium mode. Fears of frost in the Black Sea region created a nervous background.

This is reported by analysts at Spike Brokers.

The market is assuming the risk of overwintering in Ukraine and southern Russia, temporarily shifting the focus from the balance to production threats. At the same time, the global balance has not changed structurally: stocks remain significant, competition between exporters is high.

On the CBOT, wheat tested key levels after passing the 200-day average. The momentum against the background of weather risks has appeared, but without confirmation of crop losses, the growth potential is limited.

Technically, the market is in a zone of increased volatility: confirmation of damage can push prices higher, the lack of facts – quickly remove the premium. Activity in the physical market is moderate. Importers are acting cautiously, Russian and European supply is present, large world surpluses are restraining growth. Weather risks create psychological support, but do not change the balance sheet structure.

The Ukrainian market has strengthened following the external background, but large remnants of the old harvest and the expected carry-over limit the growth potential.

Traders use strengthening to find sales. There is no shortage of physical resources, and growth is perceived as a possibility of fixation.

SPIKE Spot Commodity Index Ukraine for wheat has strengthened over the week, reflecting the weather factor, but the dynamics are restrained and do not signal the formation of a stable upward trend. Buyers paid $214-215 for wheat with 11.5% protein, and forage wheat was bought for $209-210.

Tags: Ukraine, prices, wheat