Wheat futures did an about-face downward today after it was revealed the country of Egypt – the world’s top wheat importer – is refusing grain shipments with a “zero-tolerance” policy over a fungal residue that causes hallucinations if ingested in sufficient quantities. Wheat futures ended the day mixed near unchanged after rallying .07 cents above the open at both the Chicago & Kansas City Board of Trade today.
“Ergot,” a common infection found in grains, has been declared an enemy of the Egyptian agricultural authorities refusing to accept grain shipments with even a trace amount. This is a change in Egyptian policy when previously it would accept reportedly ergot levels up to one-twentieth of 1%.
Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, shared his fundamental view of the wheat futures market by stating, “Its bad enough the wheat (futures) market has been trading sideways for the past two-and-a-half months. Now the wheat trade may need some kind of clarification on grain’s export rules.” Brady added, “This can potentially keep the wheat (futures) market trading sideways for an undefined prolong period of time.”
The trend in wheat futures is technically “up” at this time after finding a low only this time last month at the $4.56/bushel area. These low wheat futures prices bode well for consumers all over the world, but they low prices unfortunately don’t last forever…
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