Hard-red winter wheat futures led the wheat rally yesterday as data reflects the slower than usual pace of domestic plantings for this particular variety, adding to global weather woes and sending the whole complex higher. Hard-red wheat futures are down .07 cents today, however, trading just below $5.09 per bushel at the Kansas City Board of Trade.
Concerns of far drier soil than Russian-area farmers are comfortable planting in, with a reported “bleak” autumn foreseeable weather is what is said to be contributing to the buying. Elsewhere in Australia, dryness is also said to be a problem and adding concerns when at this time many of their crops require much rain ahead of harvest to realize the best yield potential.
Jeff Evans, Vice-President of the Managed Accounts Division for RMB Group in Chicago, shares his view regarding the fundamental situation of the wheat futures markets by stating, “It’s looking more and more that the optimum global wheat yield potential is dwindling away by unusual weather patterns.” Evans added, “The wheat (futures) trade is surely monitoring the global weather conditions closer than normal.”
The trend for wheat futures has turned “up” in the past couple of weeks, however, no significant breakout to the upside as of yet. With the USDA crop production report within 48 hours away, I suspect volatility may take wheat futures in one direction, or the other with conviction.
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
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