Wheat Futures Forecast and Long Opportunity
According to the Financial Times’ report:
Shoppers’ rush to stock up on non-perishable staples such as pasta and noodles to ride out the coronavirus crisis has boosted demand for wheat, which has risen sharply in futures markets on both sides of the Atlantic.
Prices have been supported by increased buying by flour millers while in France, shoppers have stockpiled baguettes to freeze, leading some bakeries to ration the nation’s favourite bread.
In the UK, too, households have hunkered down as the outbreak has worsened, raising the prospect of restrictions on travel. Sales of dry pasta were up 55 per cent year on year in the week ending March 8, according to consumer data research company Kantar.
Many stores had been emptied entirely of pasta, noodles, bread and also rice.
Dave Howorth, executive director of Scala, a consultancy, said: “What we’re seeing is stockpiling and panic-buying rippling through the supply chain.”
Wheat prices have also been lifted by efforts among various governments to add to strategic inventories. “The north Africans are buying a lot of grain. Stocks are moving from France to Algeria,” said Abdolreza Abbassian, senior economist at the UN’s Food and Agriculture Organization.
Heavy falls in emerging market currencies have also revived memories of 2010, when drought and a sharp drop in the rouble prompted Russia — the world’s leading wheat exporter — to ban shipments of grains for almost a year. Last week there were jitters in the market caused by speculation that Moscow and Kyiv were considering similar measures.
Breakout and closing above 5.70 $ , Wheat prices will test 5.82 , 5.95 and 6.03 $.
Weekly closing above 6.05 will open the gates to 6.25$
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