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Should we worry about bread prices?

The situation with wheat prices is currently complex and subject to change.
Upward Trend:
  • Global Geopolitical Tensions: The ongoing war in Ukraine, a major wheat exporter, has disrupted supply chains and created uncertainty in the market. This has contributed to a general upward trend in wheat prices.
  • Weather Concerns: Drought conditions in some key wheat-producing regions and extreme weather events raise concerns about potential harvest shortfalls, further tightening supply.
  • Increased Demand: With a growing global population, the overall demand for wheat is expected to rise steadily.
Shifting Landscape:

  • Lower Stockpiles: Bloomberg's report suggesting lower stockpiles than previously thought signifies a tighter wheat supply situation. This could put more upward pressure on prices.

Reassessing Upward Trend:

  • Geopolitical Tensions and Weather: The war in Ukraine and potential weather disruptions remain major threats to wheat supply, further strengthening the case for rising prices.

Downward Pressures Might Weaken:

  • Limited Buffer from Stockpiles: If stockpiles are indeed lower, their buffering effect on price spikes might be less significant.

Increased Volatility:
  • Uncertainty Around Stockpile Levels: The discrepancy between previous assumptions and the recent Bloomberg report highlights the uncertainty in the market. This can lead to increased volatility in wheat prices.
Tip. Our algorithms gave us Buy signal when we broke local downtrend in May with possible goals around 750 USD.
Important Note: This analysis is based on readily available technical indicators and should not be considered financial advice. Always conduct your own research before making any investment decisions.
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