Black Sea Rumors Spark Wheat Selloff as Markets Remain Volatile

Friday's markets were driven by weather and geopolitical headlines, resulting in extreme volatility. Murky reports of Ukraine pursuing a proposal to keep vessels moving in the Black Sea after weeks of trading attacks with Russia sparked a massive selloff in MATIF wheat futures in Paris. U.S. wheat contracts followed suit, with Chicago September SRW wheat and Kansas City HRW wheat futures both falling over 30 cents before coming off lows at mid-morning.

September SRW wheat ended 18 ¼ cents lower, leaving it negative for the week, while September HRW wheat closed with a loss of 14 ½ cents, trimming its weekly advance to 13 cents. Both hit contract highs in overnight trade and had rallied sharply as intensified fighting threatened to curtail grain flows from the region.

The price action produced technically bearish 'key reversals' down on the daily bar charts, which can be early signs of a potential market top. However, the weather and geopolitical backdrop give bulls ammo to push back and argue that markets are prone to big daily price swings driven by headlines and forecasts.