WHEAT: Rising probability of climate anomalies fully priced in?

5월 28일

Wheat's bull run since mid March has been driven by weather concerns as a La Nina looks increasingly probable, even as fundamentals of ample supply remain bearish. Listening to commentators on the ground who don't see what the fuss is about with plentiful supply, it does occur whether they're thinking enough in terms of potential climate anomalies. This could be for political reasons, or just the trance of business as usual, and a trader can glean a possible gap to be bridged. In this case, to climate scientists reportedly dispairing because they understand what's coming up. The bigger picture trade with commodities like wheat may be expect the unexpected.

On a TA basis, the bull run has jumped on the new week's bell, but right into the weekly 200MA in white. If the price still does not match the concern for not just La Nina but global heating anomalies, the next stop may be the .618 fib in the purple box. That was also the case last year in the active season. Also to watch for is a weekly golden cross as the 50MA moves up over the 200MA.

On a fundamentals basis however, it's worth listening to analysts in the market who expect at some point a 'snap back' to match bearish supply levels on the ground. Chance then for a scalp down but also more caution needed if going long for the .618 on the weekly.

Not financial advice and you trade at your own risk.