Wheat Prices Soar Amid Ukraine War and Global Harvest Pressures
The price of wheat has surged to an all-time high in recent sessions, with US wheat contract quotes reaching $751.1 per USD. This upward trend is driven by a combination of overlapping geopolitical risks and deteriorating global harvest prospects.
Recent gains have been accelerated, with wheat prices rising 0.46% in the last session, 7.94% weekly, and 13.61% monthly. Since the beginning of the year, the increase has been 48.40%, while compared to the same period last year, the price is 42.08% higher.
The escalation of the war in Ukraine, coupled with Putin's threats, has led to investor panic and a surge in prices. The heavy rains in France and Germany have also reduced grain quality, forcing global importers to shift demand to North America. Meanwhile, heat waves and droughts in key states in the USA and Canada have damaged spring wheat crops, threatening a shortage of high-protein grain.
While the moving average setup remains strongly bullish, technical analysis suggests that the market is sending overheating signals. The RSI indicator has reached an extreme level of 83, which has almost always heralded a correction in the past.