Wheat futures have fallen after six-consecutive trading sessions higher – the longest rally in over three months – on the outlook that escalating tensions between the US & Russia regarding the Ukraine situation won’t interfere with the global grain trade. Wheat futures are down .05c per bushel from yesterday’s close as of this writing.
Following the Western countries sanctions on Russia because of the Ukrainian conflict, Russia has banned food imports from mostly North America, the European Union, Australia & Norway. Since the week ended July 31st, US wheat sales have decreased by 19% from the same time last year – according to the USDA.
Kevin Riordan, director of research at Capital Trading Group in Chicago, shared his insight regarding the current wheat futures situation by stating, “Unless there is renewed tensions in the Ukraine, demand for wheat (futures) is not expected to increase. If lower prices can’t cure lower demand then it’s hard to understand how higher prices would trigger higher demand.”
The trend for wheat futures is at a crossroads – technically “down” but a breakout above yesterday’s highs will change all that in my studies and work. Even if wheat futures do indeed trade higher, I see at least one more trade to the short side to test last week’s contract lows.
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.