James Joseph Cramer, media personality on Tuesday, stated that the prices of wheat and corn could increase due to the Russian invasion of Ukraine. The analysis was done by Carley Garner, the senior commodities market analyst of DeCarley Trading.
As per the chart analysis of senior commodities market analyst Carley Garner, corn and wheat prices are trading at a higher level. The prices could be reached an even higher level. It is the last thing we would like to see. However, we may need to be accustomed to it.” James Cramer stated.
James declared that Russia and Ukraine represent the third-largest wheat producer globally. While this year’s crop was planted before war broke out across the two countries, corn and wheat shipping and harvesting could be complicated because of the safety issues and high energy costs.
Corn Futures
Even though Ukraine is responsible for 4% of the world’s production of corn, “no trader would ever want to sell corn when the wheat board is lit on fire,” James Cramer stated. He also said that corn can gain traction because corn-based ethanol is now more affordable than oil, which has increased in recent weeks.
As per Cramer, the market analyst Carley Garner believes that the corn rally could be over soon; however, it will be a hammering. He added that if future corn prices exceed the resistance price of about $7.70 level, it could reach the $8.50 record level.
“Garner does not expect corn to break through that level; however, if it continues to roar, she would not be able to see any resistance till record level of $10.50. It would be an all-time high record. If corn rises to that new level, it is a sign we are facing an absurd level of inflation.” James Cramer stated.
Wheat futures
As per the chart observation, the recent wheat price is at the highest level they have ever been since 2008. This was the year when various factors, including dry weather conditions and high oil prices across the United States, led wheat to climb around $13 a bushel from the range of $3-$6 level; it was hovering in the past decades, James Cramer stated.
Carley Garner believes that the recent wheat prices jump was “more chaotic and even faster,” Cramer stated. Furthermore, because futures exchanges have a daily price limit, the wheat price could be “locked limit-up.” It means the price has reached its upper circuit-level during a trading session. Short-sellers do not want to sell at the upper circuit level; those sellers keep their position until the next day.
It occurred during the week that followed the Ukraine-Russian war started. As per the wheat char analysis of Carley Garner, she believes that the Ukraine-Russian war issue helps to increase wheat prices around the $13.60 level within a few trading sessions.
Moreover, Carley Garner observed that because of wheat price upper circuit-level during a trading session, few investors are net-long with around 12,000 contracts, Cramer stated. Before that, the contracts could go up to 50,000. As per the analysis of Garner, “institutional money managers wish to bet on wheat, they have to get an enormous amount of dry powder still,” Cramer stated.
James Cramer stated that, as per the analysis of the Garner, the corn and wheat prices might increase in the coming trading sessions.
The wheat price peaked on 8th March 2022 and then underwent six limit-up movements; the wheat futures fell sharply, as per the Garner observation. However, wheat prices remained above the 20-day moving average. However, the Relative Strength Index (RSI), a momentum indicator, pulled back the cost from the overbought territory, while wheat prices remained positive. It means a wheat price has “got more space for expansion,” Cramer stated.
“As long as wheat price holds above its support level around $10.30 per bushel, which is now down nearly 90 cents from current price. The commodity analyst Garner believes that the wheat can be able to make another attempt at its high-level breaks in the next few weeks or even the next few months.” Cramer stated.
