市場新聞與洞察

Wheat Trading Opportunities Wheat is a well-known soft commodity that is vital for any kind of bread product. It also has important uses for the feedstock for cattle which is vital in economies with large agricultural sectors. The supply and demand for wheat can be volatile with changes occurring for a multitude of different reasons.

The most recent spike in price was caused by the Russian and Ukraine Crisis. The soft commodity saw a large spike largely due to the economic sanctions placed on Russia and supply chain pressures that the war caused in Ukraine. Both countries are large exporters of wheat with Ukraine producing about a fifth of the world’s high-grade wheat and 7% of all wheat across the world.

Therefore, the supply shock had a large effect on the supply available driving up the price. Some of the other countries that produce the bulk of the worlds supply include China, the USA, Canada, Australia, and India were able to benefit from the higher prices. A strong USD Like all commodities, wheat is quoted in USD.

This means that when the USD is strong, the price of the commodity becomes weaker because the producer must sell their produce for less. Due to recent market volatility the USD has risen as investors have looked to the USD for safety. This has in turn negatively affected the price of wheat The Price of Oil The price of oil plays a role in the overall price of wheat.

This is because oil is an important input cost for wheat. Oil is needed for both the transportation and the actual farming of wheat. As the price of oil increases the costs must then be offset by the wheat producers who then raise their resale price.

Therefore, when forecasting what the price of wheat may do in the future, assessing the future of the price of oil can be a helpful tool. Emerging economies Countries with developing economies tend to be higher importers and consumers of wheat. In addition, countries in the Middle East and Africa import lots of wheat because they do not have an environment that is conducive to producing wheat.

For instance, in countries in the desert such Egypt where there is little water, and it is exceptionally dry such as Egypt very little wheat is produced. This explains why Egypt is one of the highest exporters of wheat and if the demand from these countries it would likely impact on the overall price. Technical Analysis The price chart of wheat tells an important story.

It can be observed that the wheat futures initially spiked at the beginning of the war in Ukraine as the market reacted to the initial supply shock. The price then moved into a tight consolidation tightly before breaking out towards the highs. However, this breakout failed, and was unable to rise above the key resistance level at $1354.

The price of wheat then entered a downward trending channel where it currently remains. The price has also broken down below the 200 Day Moving Average which does not bode well for bullish moves in the short term. Before this break down, wheat had not fallen substantially below the 200-day moving average since June 2020.

On the other hand, the price is currently sitting in the top half of the channel. The price may be able to break out of the channel to the upside. In addition, it is also sitting in area of long-term support between 750-850 USD.

Wheat Future Contract CFD’s can now be traded on MT5 on GoMarkets platforms

The USA and other Western nations have intimated that they are planning to block Russia's access to its international stockpile of gold. Russia has so far been able to use gold to support the Rubel as a tool to reduce the impact of sanctions. Russia has been able to trade gold assets for more liquid foreign exchange that have not been subject to current sanctions.

Tech stocks continued their momentum overnight as the Nasdaq closed at its highest level since February 9, up 1.93%. Intel was a top performer overnight as it rose 6.94% on reports that it may assist NVIDIA corporation in chip manufacturing. Uber also had a stellar night increasing by 4.96% after it reached an agreement to list NYC taxis on its app.

The Dow Jones closed 1.02% higher as material stocks performed well. The S&P 500 reflected the positive momentum as it closed the day up 1.43%. In Europe, the FTSE had a relatively flat day.

The material sector performed strongly, supporting the index as it closed up 0.09%. The DAX also had a relatively flat day finishing down 0.069%. Commodities Brent Crude oil failed to carry on its rise as it dropped back 2.69% to $118.14.

Although the price is still holding above the $115 level. The gold price saw a mini spike out of its consolidation as it jumped by 0.69% to USD 1957.41. The move can be somewhat attributed to the potential for new sanctions on Russia.

Natural Gas had another bumper day as it rose by 5.81%. The price extended break out as it closed at its three-month highs of $5.464. The USA may be forced to increase its exports to Europe to offset any disruption in supply from Russia.

Cryptocurrency Bitcoin performed solidly overnight. It is currently testing the highs of its recent range and as the BTC/USD approaches the $46,000 resistance level. The pair closed at $44,091, a 2.56% increase, at 22.36 GMT.

Ethereum has kept its strong week going with another 2.59% rise holding the $3118 at 22.42 GMT. The ETH/USD has seen a recent period of consolidation before overnight breaking above the trend line. The JPY continues to be smashed against most other currencies.

The USD/JPY rose by 0.97% to 122.324. The GBP/JPY also saw a huge move moving 0.88% to close at 161.330. The AUD/USD had a mixed day.

Initially, the currency pair sold down, however it recovered later to close at 0.7512. The EUR/USD has seen a settling of its price as Ukraine and Russian conflict has settled. The pair finished trading at 1.0998 USD.

Global indices were choppy overnight, mainly finishing lower on the back of failed peace talks and Russia continued advances in Ukraine. According to reports from the French government, the Russian president Vladimir Putin intends to take the country by any means and that “the worst is to come”. The reports sent the FTSE 100 down 2.57%.

The decline was further aided by the removal of Russian equities from the index. In addition, the DAX followed dropping 2.16%. In the USA the NASDAQ closed down 1.56% as the tech sector saw more selling.

The FANG stocks were all down continuing from what has been a volatile week. The Dow Jones and the SP500 performed a little better but were still up and down during the trading session. Overall, the S&P500 finished down 0.53% and the Dow Jones 0.29% respectively.

Money continues to flow into commodities as pressure is growing for Western countries to ban Russian oil and gas imports. Gold continues to provide strength in the volatile market holding $1936 USD per ounce. Oil touched $119 USD a barrel before tapering to $110.

Nickel was also a strong mover jumping 6% to $27,815 its highest level since April 2011. Wheat continued its rise another 5.46%. Palladium, another commodity in which Russia is a large producer, is also up 3.2% to $2,753.68 by 12.43 GMT.

Palladium is a crucial metal needed by Automakers for catalytic converters to curb emissions. Iron Ore showed some strength increasing by 5.5% to $153USD per tonne. In currencies, the BTC/USD pair lost momentum at $42,541 USD down 3% at 10.45 pm GMT.

Ethereum is also down 4.48% over the last 24 hours. The EUR/USD fell to fresh levels of 1.1032 its lowest level since May 2020. The markets remain volatile and very reactive to news coming out of Europe as the weekend approaches.

US indices had a bumper day of trading as the Federal Reserve increased interest rates by 25 basis points. The Reserve is also expected to raise rates to between 1.75% and 2.00% by the end of the year, with 7 increases expected till the end of 2022. The Federal Reserve made it clear that they are doing their utmost to fight inflation.

Jerome Powell also indicated that the economy shouldn't need to enter into a recession. Whilst the Federal Reserve lowered economic projections for 2022 and increased inflation most of this had already been priced in. The Nasdaq finished the very strong session up 3.77% as tech stocks rebounded after initially selling down on the Federal Reserve’s announcement.

It was supported by the Dow Jones and the S&P500 which were up 1.55% and 2.24% respectively. In Europe, the FTSE had a solid day rising 1.62% and the DAX performed very well increasing by 3.76%. The Chinese stock market both in Hong Kong and on the mainland was also roaring yesterday on the back of a commitment from China’s State Council to sure up and introduce policies to boost its economy.

The CSI 300 index gained 4.3% and the Hang Seng index jumped 9.1%, its largest jump since 2008. This may provide some confidence for the region. Commodities Commodity prices continue their retreat from their highs a few weeks ago.

Brent Crude Oil continues to hover below 100 USD finishing the day at 97.96 USD a drop of 0.74%. Gold was able to hold its support level at 1917 USD per ounce and bounced after initially dropping below 1,900 USD due to the interest rate announcement. Natural gas continues to tighten its price range and increased by 2.80% Cryptocurrency Bitcoin had a high volume buying day as buyers stepped up and the price of BTC/USD increased by 4.83% to 41,202 USD.

Bitcoin remains rangebound however the volume increase indicates attention may be returning. Similar results occurred for Ethereum with the ETH/USD increasing by 5.60% to 2,766 USD. FOREX The USD was weak against most other currencies following the Federal Reserve's announcement.

The AUD had a strong day backed by its commodities moving up 1.29% against the USD. The EUR/USD and GBP/USD both reacted positively to Federal Reserve’s announcement, with them moving up 0.71% and 0.81% respectively. Against the CHF the USD was able to hold up relatively well at the 0.9400 level.

The market will likely continue to react to the news from the Federal Reserve as the week draws to an end.

The US technology sector rose again last night and worked back the losses from the previous day of trading as the market came to grips with the Federal Reserve’s announcement surrounding interest. Tesla was a standout performer and has seen a huge rise in the last week rising more than 20% and rising 7.91% overnight. The Nasdaq moved up 1.95%.

The Dow Jones was slightly weaker as commodities had mixed results, although the index was still up by 0.74% and the S&P 500 finished the session up 1.13%. In Europe, banks and financial stocks helped power the FTSE to a solid day up 0.5% and the DAX ended up 1% with similar strength shown in the financial sector as they look to benefit from rising interest rates. Commodities Commodities saw relatively mixed results across the board.

Gold was down 0.75% to 1920.80 as it continues to consolidate after pulling back from the highs a fortnight ago. Brent Crude Oil fell back 1.59% to USD 114.48. The commodity took a breath after rising 17.89% in the preceding three days.

Natural gas has seen a breakout of its consolidation as it broke above $5.00. The spot price finished up 4.35% at $5.185. Natural Gas daily chart Cryptocurrency Bitcoin had another solid session with the BTC/USD pair at $42,650 at 10.31 pm GMT.

Bitcoin has continued its rally from the previous week which is up a combined total of 12.56%. Ethereum has performed even better with a 4.92 rise overnight and an 18.63% increase over the last two weeks. The price of ETH/USD is currently sitting just above $3000 at $3002.71 at 10.36 pm GMT.

FOREX The AUD/USD has continued its move up. The price has broken out of its channel and is approaching $0.75. The EUR/USD, after selling down early in the day, the price was able to recover and then finish the day up 0.12% at $1.1029 as it continues its rally from the lows of two weeks ago.

The USD/JPY is rocketing along as it approaches its long-term resistance at 125 JPY. Overnight the price broke through 120.00 JPY and closing at 120.092JPY, a 1.08% increase.

Andrew ‘Twiggy’ Forrest has bet on a winner in Australian Agricultural Company (AAC). The company is Australia’s largest integrated cattle and beef producer and is recognised as the oldest continuously operating company in Australia. In recent week’s key investment figure, Twiggy Forrest through his investment company Tattering, has doubled its holding from 8.97% to 17.4% at a cost of approximately $122 million making it a substantial holder.

The old investing and trading adage is that you should always follow the big money, and, in this case, the big money could not be much bigger then Twiggy. Company Overview AAC operations consist of properties, feedlots, and farms on around 6.4 million hectares of land in QLD and the Northern Territory representing almost 1% of all land mass in Australia. The company then exports the beef to key markets globally.

The company currently has a market capitalisation of $1.28 Billion and a share price of $2.11 as of 3pm EST 5 July 2022. Recent Performance The company has seen very strong earnings in recent years as they have improved their margins and reduced their costs. In the 2022 year their sales and production volumes dropped off.

At the same time Asian and Australian volume were down 21% and 24% respectively which do lead to some concern. With over half of its product being sold in Asia, the Asia pacific region specifically is a pause for concern. However, with the price of Wagyu beef sales increasing by 20%, the company has been able to offset the volume drop off and see revenue remain steady.

Opportunities The company has been expanding globally and this has seen a high demand for its products internationally. With a 56% increase year on year and a 21% volume increase in sales the USA represents a market that is hungry for AAC and its beef. The leadership of AAC has shown an impressive ability to minimise costs in times of low profitability and ensure the company does not operate with negative cashflow.

According to DataM Intelligence Analysis (2021) The price of Wagu Beef is expected to compound 7% annual for the rest of the decade. These figures bode well for AAC. Management has shown itself to be particularly impressive in reducing costs and improving margins particularly during difficult years during Covid 19.

It was able to improve its operating margin by 43% from the prior year showing just how effective it can be. Weaknesses With growing inflationary pressures and a global theatre that has seen many disruptions to the supply chain, the potential increase or blowout of costs related to the logistical movement of good may be cause for concern. Particularly with much of its market overseas, the potential for supply chain pressures is great for AAC.

In addition, any further border closures, or economic sanctions may prove to be problematic for the company. Technical Analysis The company’s share price has seen a significant rise in recent weeks in its price and pure volume of buying. The chart shows a significant coiling of the price as the buying volume was building and the sellers were drying up.

The price has also broken through the multi decade high of $2.13 on significant volume. The $2.13 level had added importance as it was also the midpoint of the 20-year range. In recent days the market has retested the $2.10 level but a short/medium term technical target of $3.38 is not out of the question.

In the Long term a price target based on the fundamentals of the company, the increase in price of Beef, management’s history of effective financial management and the growth pathways in the USA and Asia may see the share price rise towards $4.50.