Wheat futures will have to assess the damage done to South American crops affected by the reportedly worst El Nino to strike the continent in 30 years. Wheat futures ended the day up .11 cents to close just above $5.03 per bushel at the Chicago Board of Trade.
This week has seen flooding and landslides in both Argentina and Chile that is said to have damaged crops as well as 30 towns affecting 20,000 people. It is reported that not only 3.5M hectares of wheat crops were hit in Argentina, but the heavy rains will also bring on fungal disease which will adversely affect the wheat’s quality.
Laura Taylor, a senior market strategist at RJO Futures in Chicago, had this to say regarding the fundamental assessment of the wheat futures markets, “The wheat (futures) market was just hit hard with yesterday’s report, but this news concerning South American wheat cannot be overlooked.” Taylor adds, “Hopefully our domestic wheat market will be enough to feed those affected there.”
The trend for wheat futures is down with no bottom yet in sight. Hopefully yesterday’s downward action was a “capitulation” phase for wheat futures.
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