Wheat: Weak crop in Europe and United States can lead to wheat growth

Dry, hot weather from the U.S. to Europe is taking its toll on crops, and the U.S. government is forecasting global output will fall for the first time in five seasons. The adverse conditions have pushed benchmark futures in Chicago to their best start to a year in a decade, a stark reversal from the previous four years when burdensome supplies dragged down prices.

Time problems have already frightened the bear hedge positions in Chicago, and for a third consecutive week they have fallen, with long positions increasing. In the States it is considered that this is the worst year since 1988.

Technical analysis

Our expectations: the price has broken the 5-year descending trend as it is currently adjusting. Our expectations are that the price will continue to move in the upward direction and, with appropriate adjustment, we will position ourselves with long positions on the new upward trend.

Alternative Scenario: If the price goes back under diagonal support and stays there for several consecutive days, the positive scenario will be spoiled and more likely to see a price drop.

Comment: The price has broken the long-term channel and is in a corrective downward movement. A deeper adjustment will give us good short-stop inputs below long-term diagonals. Currently, CCI (50) is over 0, and CCI (14) crosses 100 top-down, which means long-term traffic is Long, and short-term adjustment is still in place. 50 over 200SMA - positive signal.
We remain awaiting better levels for long positions.

Jr Trader Petar Milanov

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