European Grain Prices Take Customers from US; Wheat Futures

Wheat futures prices may need to fall further in order to be competitive.  The worlds biggest wheat importer, Egypt, is reported to be buying its nation’s wheat supply for the first time in 11 months, but they’re not buying from the US – even as wheat futures have fallen .60 cents from last months highs.

The outlook for US wheat supplies appears to more expensive than Russian supplies at $287 per ton, which is more than Romania’s wheat at $283 per ton, which is still pricier than French wheat that the Egyptians are buying at $277 per ton (as of yesterday).  Egypt is tendering for at least 60,000 tons wheat for next month.
Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, had this to say about the current wheat futures situation,The EU has become the world’s low cost wheat seller and is likely to garner additional demand from North Africa in coming months.  The action by “managed money” over the last 2 weeks suggests they intend to build back their hefty net short position as export demand has shown signs of slowing.”

Wheat futures trend has rolled over down since the beginning of the month.  Since then, there has been no significant short-covering rally in wheat futures prices, and I’m still looking for a lower-risk entry.


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