Trading Wheat in increased volatility – Expanding trading horizons

[Redator]

Volatility has surged across commodities this week, driven by central bank policy shifts and renewed supply concerns—particularly in wheat markets.

Commodities are essential raw materials used by both consumers and industries. Their prices are influenced by global economic forecasts, supply-demand imbalances, seasonal factors, and both anticipated and unexpected disruptions to production or logistics.

To track broad market trends, traders often refer to the Bloomberg Commodity Index (BCOM).

Wheat, one of the first ever traded commodity (1877), with contracts listed on futures exchanges such as the Chicago Board of Trade (CBOT). While institutions primarily use futures, retail traders can also gain exposure via CFDs.

The wheat market has experienced sharp price swings over the past five years, notably triggered by Russia’s invasion of Ukraine and escalating drought risks tied to climate change. These events have raised long-term concerns over global food security.

To stay informed on wheat supply conditions, traders monitor several key reports:

• WASDE (World Agricultural Supply and Demand Estimates) – released monthly, typically around the 10th
• USDA Weekly Crop Progress – published every Monday
• Weather updates and forecasts – including NOAA climate models
  

Geopolitical developments in the Black Sea region are also critical. Recent reports indicate severe drought conditions in Russia’s Rostov region, a major wheat-producing area.

Let's take a look at longer-term charts to spot trends and longer-run support and resistance levels for Wheat trading as high volatility is expected for the times to come.

Wheat CFD Monthly Chart

Wheat CFD Monthly Chart, June 20, 2025 – Source: TradingView

Wheat is a mostly rangebound product in the past 20 years with 2 periods of major uptrends

• The first in 2006-2008 as producer regions got hit with major droughts at the same time as spikes in Oil prices led to high fertilizer costs
• The second in 2022 as Russia invaded Ukraine which created major supply fears

These spikes are usually met with subsequent major corrections as producers use higher prices to sell future productions on Futures exchanges to find other ways of agriculture.

Lower Oil prices also has a dragging effect for wheat prices due to export costs and general production costs lowering.

Major Support is found between $4.5 to $5, where prices are currently bouncing and except for the $13 to $14 spikes, the Major monthly resistance is closer to $9.

Wheat CFD Weekly Chart

Wheat CFD Weekly Chart, June 20, 2025 – Source: TradingView

Wheat has been trading in a $1 range (between $5 to $6) since October 2023 as the correction from the 2022 Russian Invasion price spikes led to a consolidation at the Monthly Support.

Since, prices haven't broke out majorly, though traders should stay in touch with the latest news from Russia, Ukraine and also Canada who are major wheat producers.

The Weekly RSI is rising rapidly and the Weekly MA 50 is acting as support, something to watch for the development of potential future trends.

Wheat CFD Daily Chart

Wheat CFD Daily Chart, June 20, 2025 – Source: TradingView

Looking closer, we see how the announcement from Russia led to a major spike in prices (close to +10% in 3 trading days).

Prices are now trading in the Current Major Pivot Zone $5.5 to $5.6.
Keep an eye on reactions from this key level as any consolidation from here or a break above would point towards a test of the high of the October 2023 2 year range.

Any upside breakout from here could be found with some further resistance at $6.39 (major pivot in last downtrend)

Safe Trades!

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