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“Technically, the December price broke the resistance line that existed at US$ 8.80/bushel and closed 10 cents above, at the maximum limit of what it could rise on the day. In the overnight session, it rose to 919.50 and closed at 905.75, 15.75 cents above yesterday's daytime close. The main news to follow is the possibility of the Black Sea grain agreement breaking or not”, says TF senior analyst, Luiz Pacheco.
If Russia really breaks the agreement and the flow of corn and wheat grains from Ukraine has to be stopped, he points out, the market's upside potential is the same as it was at the beginning of the war: reaching up to US$ 1275/bushel , bringing back the good prices that were lost by the Brazilian market.
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“If this happens, Tradings will return to offering higher prices and a large volume of Brazilian wheat could be sold, completely changing the pace at which the wheat market in the country was operating until this Tuesday. But, talking to a Russian Trader, he told us that the impact is not expected to be total yet, because the agreement will last until November and he does not believe there will be a rupture before then. So, it would be time to take advantage of the rise”, reveals Pacheco.
Another aspect to be monitored, points out the expert, is the price for December 2023 (from the 2022/23 harvest), which also rose 46 cents/bushel along with the price for December 2022 and could fall, just as this price rose between February and May of this year and then fell. “So, our advice is to take the opportunity to fix wheat prices for the 22/23 harvest this week”, he concludes.
By: Leonardo Gottems | agrolink
