WHEAT

WHEAT weekly special report based On 1.00 Lot Calculation:

GLOBAL WHEAT MARKET SHARE:

• LARGEST WHEAT PRODUCERS (OF TOTAL PRODUCTION EXPECTED IN 2022: 774.8 MILLION TONES): China at 17%, European Union at ~17%, India at ~14%, Russia at ~10%, USA at ~6.4% and Ukraine ~3.4%.
• LARGEST WHEAT EXPORTERS OF TOTAL 183.8 MILLION TONS (2020/2021): Russia at 23.9%, Canada at 12.44%, USA at 12.24%, France at 10.30% and Ukraine at 8.9%.
• RUSSIA + UKRAINE SHARE at ~30%: Russia and Ukraine make around 33% of total global exports.

RUSSIA- UKRAINE WAR AND RISING TENSIONS IN BLACK SEA:

• TENSIONS IN THE BLACK SEA (ONE OF THE MOST IMPORTANT GRAIN SHIPMENT CORRIDORS) BETWEEN UKRAINE AND RUSSIA KEEP FEARS HIGH OVER ESCALATION. Tensions have increased recently as Ukraine attacked Russian ships with military drones, while Russian troops kept targeting Ukrainian Black Sea and Danube river ports, to make sure that Ukraine does not export grains.
• RUSSIA PERMANENTLY EXITS GRAIN DEAL, NO POSSIBILITY OF RENEWAL: Russia has formally terminated the Black Sea grain deal, emphasizing no possibility of renewal. The termination of the deal is set to take about 33 million tons of grain off the global supply. The sharp decline in supply could trigger a supply/demand gap, which could lead to higher prices.

OTHER FUNDAMENTAL ANALYSIS:

• WHEAT STOCKS CONSIDERED IN EXCELLENT CONDITION FALL FROM 49% TO 42% IN THE U.S., FUELLING FURTHER SUPPLY CONCERNS. Wheat stocks that were considered in excellent condition falls by 7% over the last week, fueling supply concerns for the commodity and could push wheat prices higher.
• U.S. DROUGHT CONDITIONS SPREAD. The latest weekly data from the U.S. Department of Agriculture estimated 57% of the domestic corn crop and 51% of soybeans are dealing with drought conditions, 12% up from last week for both, as the trouble spreads in the Midwest and Plains. A three-month seasonal drought outlook by the U.S. Climate Prediction Center forecast drought conditions persisting. Prices for corn and wheat also are rising in the European Union, which also has been hit by hotter than usual weather.
• AUSTRALIA’S WHEAT PRODUCTION IS FORECASTED TO FALL 34% IN THE COMING SEASON. Australia’s wheat production is expected to fall 34% in the coming season, as unfavorable weather conditions impact production negatively. Australia was the second biggest global exporter this season, with a production decline set to fuel supply concerns for the commodity.
• ROMANIA, ONE OF THE EU’S LARGEST WHEAT PRODUCERS, HAS ITS WHEAT HARVEST FORECAST CUT BY 15%: Romania’s wheat harvests are set to come in lower than initially anticipated, with analysts cutting their harvest forecast by 15%. The cut could fuel supply concerns.

RECENT PRICE ACTION:

• WHEAT PRICES HAVE HAD A DOWNWARD CORRECTION OF AROUND 57.23% (FROM $1340 ON MARCH 4 2022 TO $573 ON MAY 31, 2023). In early March 2022, the Wheat prices rose to an all- time high of $1340. Wheat traded last around $600, and if a full recovery happens, it could provide an upside potential of around 123%. However, the price could decline further.
• STRONG SUPPORT AT $600: Since 2020, Wheat has been predominantly trading above the mark of $600. Wheat has tested the area around $600 five times since 2020, and every time it would recover to levels toward 700 or above. (Data Source: Fortrade Meta Trader 4 Platform)

*Please note that past performance does not guarantee future results.

WHEAT, August 22, 2023
Current Price:600

Example of calculation base on weekly trend direction for 1.00 Lot¹

1. 1.00 lot is equivalent of 100 units

2. Calculations for exchange rate used as of 09:30 (GMT+1) 22/08/2023
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