Chart of the Day - Wheat
In terms of market-moving news, this past weekend has been very calm with neither politicians, nor central bankers delivering any significant comments. However, recent developments in the Russia-Ukraine war are pushing wheat as well as crude prices higher at the beginning of this week.
Russia has intensified shelling of Ukrainian ports after withdrawing from the Black Sea grain export agreement. Also, attacks of Ukrainian maritime drones on Russian Navy vessels have become more frequent recently. It was reported that apart from Russian Navy warships, a Russian oil tanker was also targeted this past weekend. This has led to a small jump in oil prices at the beginning of new week's trade as investors fear that it may limit Russia's ability to export its crude via Black Sea. However, it also means that return to the Black Sea grain export deal may be harder as hostilities at sea are picking up. As a result, we are observing an over-3% jump in wheat prices today.
Taking a look at WHEAT at D1 interval, we can see that the commodity has recently made another failed attempt at breaking above the 765 cents per bushel resistance zone. Price pulled back later on and declines were once again halted at the 625 cents per bushel support zone. Price is trying to bounce off this area today. A near-term resistance zone to watch can be found ranging around 665 cents per bushel, marked with previous price reactions as well as 50-session moving average (green line). However, if bulls fail to maintain control over the market and the price breaks below the aforementioned 625 support, a deeper drop may be looming. This is because the zone marks the neckline of a double top pattern. A break below the neckline would confirm the pattern and may trigger a drop with a textbook target range of 475 cents per bushel.