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Base Chart (Non-Annotated) courtesy of Trade Navigator.

Comment As of Wednesday Dec 4, 2024 : Close

The chart pattern for Paris Milling Wheat Futures shows a third “higher low” since the last week of August, and now a breakout high above the recent previous tops. This contract is a leader in global wheat pricing, so this move is a signature of a move upward that is incomplete, but in harmony with a growing basis for a larger move. This pattern would be deemed a failure only if the price drops below the December low and confirms by breaking under 219.50.

AS of mid-Nov’24: A series of unfortunate weather events starting late last winter including early cold temperatures and later excessive moisture in French wheat country has set back that nation’s wheat production. European Commission data shows just 614,200 tonnes of French wheat has been exported in the marketing year-to-date, versus 2.19 million tonnes in the same period last year by this point, a 72% decline(!). The dramatic statistical decline in estimates of the French wheat crop after a long and miserably wet harvest was the primary driver of the subsequent positive price run, and it also had a positive effect on global markets. - In spite of such dramatic production and export figures, the price in Paris has declined in response to Black Sea export prices.

Even with a dramatic French export reduction, Russia is still aggressively selling wheat, and Ukraine is still able to ship wheat without being too fussy about price. There is still plenty of wheat for sale in the world.

The Marché à Terme International de France "International Futures Exchange of France" trades in Paris, France is the largest wheat producing nation in the European Union, so the Paris Milling Wheat contract is significant to the region and to the world, including the Black Sea origins. As Russia and Ukraine together account for a solid third of the entire global wheat export trade, Paris has emerged as a key price discovery point. When this price leader breaks downward, the world cannot ignore the pattern.

Paris wheat lives in the shadow of the Russian wheat machine that will continue to set the low price boundary of the global markets for any buyer willing to finance without the benefit of the banking system controlled by the West. Paris wheat can be used as a market canary reflecting Russian domination of their regional wheat sales territory.