Wheat price has curbed its losses by rising by 1.11% to $614.17. Despite Monday’s gains, the commodity remains on a downtrend ahead of April’s WASDE Report. A strong US dollar and favorable weather conditions have also exerted pressure to the prices.
April WASDE Report
Wheat price is trading higher as those whose interest is to invest in commodities await the WASDE Report on 9th April. In March’s report, the USDA’s outlook was largely unchanged. At the global level, the agency adjusted its supplies up by 3.5 million tonnes. The commodity’s consumption and global trade were also raised by 6.6 million tonnes and 2.9 million tonnes respectively.
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In this month’s WASDE Report, favorable weather conditions and demand from China are expected to influence the agency’s outlook. The rising corn prices have led China to rely on wheat as an alternative livestock feed.
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Besides, there is improved weather conditions for agricultural activities in the Northern Hemisphere. Substantial rainfall has been recorded in Russia, Ukraine, and the US Plains. As such, USDA is likely to adjust its outlook for wheat supply to the upside.
Despite the recent rise in wheat price, it remains under pressure from the strengthening US dollar. On Monday, the US 10-year treasury yield rose by 3.31% to 1.72. The soaring yields have offered support to the greenback, which remains at its 5-month high at around $93. Like most other commodities, wheat price has an inverse relationship with the value of the US dollar.
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Wheat Price Technical Outlook
On a three-hour chart, wheat price is trading along the 20-day exponential moving average and slightly below the 50-day EMA. Besides, it has formed a bearish flag that spans from mid-last week. While the outlook remains bearish, wheat price is likely to rise in the near-term before falling again. It will probably surge to $625, where it will experience some resistance. The bulls may then manage to push the price to $630 before moving back on the downside. Its support level will then be at $600.
However, this thesis will be invalid if the price falls from its current level of around $610 to below $600. If that happens, the targets will be at $590 and the prior support level of $565.
