Wheat is the only grain in the agricultural sector facing selling pressure after the holiday. Although it remains on a downward trend, the market is showing signs of stabilization at the support level of 556. Given the generally bearish fundamental outlook, we believe wheat may continue its downward trend today.

According to consulting firm IKAR, Russian wheat export prices continued to decline last week, boosting export activity. IKAR reported that FOB prices for 12.5% protein wheat at Russian Black Sea ports reached $219/ton last week, down $5/ton from the previous week. Meanwhile, SovEcon also noted that Russian wheat export prices ranged from $218 to $224/ton, lower than $224 to $330/ton the previous week. SovEcon indicated that Russia is ramping up wheat exports due to better prices. Last week, Russia exported 1.12 million tons of wheat, compared to 0.72 million tons the previous week. With export forecasts reaching up to 52 million tons in 2024, Russia is expected to remain the world’s largest wheat exporter this year, alleviating concerns about supply shortages and putting long-term pressure on prices.

In Ukraine, the overall crop condition remains good. The country’s Ministry of Agriculture cited data from scientists indicating that 98-99% of Ukraine’s winter wheat is expected to survive this winter. This is a positive sign for the crop, as approximately 7% of the area typically suffers losses due to frost and freezing conditions during winter. With winter wheat accounting for over 95% of Ukraine’s total wheat production, this factor is likely to drive selling pressure in the market today.

As supply from the Black Sea region continues to pressure the market, the downtrend in wheat is expected to persist in the medium term. However, technical support at the previous bottom of 550 - 555, combined with RSI indicating oversold conditions, suggests that wheat may experience a short-term upward correction during today’s session.

Source: MXV