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The Federal Reserve raised interest rates by a quarter point and signaled a possible pause due to recent bank failures and the debt ceiling deadline. KC hard red winter wheat settled 45 cents higher, and CBOT rallied into the close on drone attacks on the Kremlin.
The commentary says grains and oilseeds were oversold and due for a recovery.
Rate policy and the debt ceiling affect the dollar and fund flows, while the geopolitical rally offered a short-covering bounce in wheat. Analysts expect continued volatility as old-crop markets transition to new crop.
stonex.comCraig TurnerMay 3, 2023After 10 past bullish macro events, Wheat (HRW) moved a median +0.8% over 5 sessions (60% higher; middle half -1.9% to +3.1%), and +1.3% over 20.
After 57 past bullish macro events, Wheat (SRW) moved a median +0.3% over 5 sessions (65% higher; middle half -0.5% to +1.7%), and -0.7% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
On May 3 KC HRW wheat settled 45 cents higher as oversold grains rebounded, helped by a dovish Fed signal and Kremlin drone attacks that lifted Black Sea risk premium, which fits a sharp 5-day move.
