Wheat futures found early support in today’s trading session following yesterday’s plummet following the USDA Crop Production report. The reason for the abrupt halt to the initial wheat futures slide is the fact that there are prospects for declining domestic production versus rising world supply.
The USDA reported yesterday US wheat output may be down slightly more than previously reported last month, but the bigger issue is domestic output is now estimated to be 8.8% less than this time last year.
“The USDA shocked the market by lowering US wheat production estimates. Conditions in other producing regions are expected to more than offsetting lower expectations from the US,” said Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, regarding the current wheat futures situation.
The trend for wheat futures is now clearly down. I expect a pull-back higher in wheat futures prices soon and will await a lower-risk opportunity to short this market.
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.