Wheat futures may be finding much needed support as the tropical storm phenomena “El Nino” is looming for Australia’s wheat fields. The country “down under” is standing-by for a drier winter in the wheat growing regions in the east & south.
Australia’s national meteorology center predicts a 60% chance of “below-average” rainfall between June & August – their winter months – where they need it most for their wheat crops. The USDA ranks Australia as the world’s fourth-biggest wheat exporter, but is set to take a back-seat to Russia as they boost their shipments of wheat.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, had this to say regarding the current wheat futures situation, “Wheat futures saw recent drawdowns as rainfall has boosted crop forecasts across Russia and the southern U.S., however this may not be the case with the crop forecasts coming out of Australia. The Australian growing regions may experience lower rainfall due to a possible El Nino effect.” Levy added, “Concern over the El Nino possibility may begin to lend support to the wheat futures prices.”
The trend for wheat futures is down with no bottom yet in sight. We were just stopped out of our wheat futures “short” position today and am looking to reset short again soon.
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.