The wheat futures market is in a state of limbo, with chances of price going either up or down. Wheat futures are currently at a level of support after a continuous downtrend for most of the year. This downtrend has been fuelled by increasing supply of wheat that has raised stocks both in the US and worldwide. When the US Department of Agriculture released their report on the 12th of December, it showed that wheat stocks in the US had actually risen by 25 million bushels. The story was the same in most places around the world. production in the EU and Canada had risen so much that it compensated for the decline in Yemen, South Africa and Brazil.
However, the technical analysis supports an uptrend, if only in the short-term. The RSI is still trending at oversold areas, which could mean there is potentially some uptrend to come. Furthermore, even the fundamentals support a bit of an uptrend. In the US, most of the spring wheat growing areas , 51%, are experiencing a drought. Besides, even with the increasing supply, it can still be considered to have declined compared to 2016 stocks. Therefore, there is a chance wheat might recover in 2018 and go on a strong uptrend. Even if it doesn’t, the uncertainty created is enough to keep the wheat market volatile next year.