Supply Outlook Takes Wheat Futures to Two-Week High

Wheat futures are really finding traction after Tuesday’s USDA report revised domestic and global wheat inventories lower. Both hard-red winter wheat, and the soft-red winter varieties broke out to highs not seen in over two weeks at the Chicago Board of Trade, and the Kansas City Board of Trade, up .085 & .055 cents per bushel (respectively).

This is five trading sessions in a row that wheat prices have been higher before and after the USDA report. The revision’s, however, are only slightly less revised (in my opinion) and the spike higher (.25 cents from their recent lows only last week) seems to be an exaggeration of the report.

Nothing moves these grain markets as consistently as USDA reports, and this current wheat (futures) spike is a testimony to just that,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, sharing his fundamental analysis regarding the current wheat futures situation. Craney added, “…a combination of (wheat futures) short-covering and a needed relief rally if you ask me.”

Wheat futures trend is clearly down with no clear bottom formation in sight. I personally view wheat futures current rally as an opportunity to reset short positions when the market decides to test last week’s bottom.

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.