Wheat futures have rallied just over .20 cents from Monday’s monthly lows, but that’s peanuts compared to the unexpected $1.27 drop in wheat prices from the June 30th high. Wheat futures are up a nickel currently trading at $5.07 per bushel at the Chicago Board of Trade.
Despite last month’s sell-off, a Midwestern agricultural marketing strategist claims there are a couple of more rallies to come especially now that the cutting of the hard-red variety is mostly past at this time. As an advisor to domestic farmers nationwide he says to consider the seasonal standpoint and realize “making a lot of sales at harvest is rarely the right thing to do.”
Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, had this to say regarding the fundamental assessment of the wheat futures markets, “It’s not just here in the States where we have had weather problems creating volatility, but now there’s weather situations arising world-wide such as Australia, Brazil, and Russia – Brazil currently with the heavy rains.” Plotkin adds, “There should be more wheat (futures) volatility to come, but there should be more upside potential than downside looking forward.”
Wheat futures trend is down at this time and it is going to take more action to change that. I would expect wheat futures to continue this leg up through tomorrow, but at least one more test of the low before an up-trend were to emerge.
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