Harvest Down Under May Boost Wheat Futures

Dry weather is said to now be plaguing Australian wheat crops – reducing yields.  Their wheat production is expected to decline about 25% to their lowest production levels since 2007, less than their gov’t estimate.

The Australian wheat crop was recored at 29.5M tons last year (a record amount), but this year is already expected to yield just over 2M tons less.  Wheat futures climbed to record highs earlier this year based on bad weather, so we see that trend continuing…

Kevin Riordan, director of research at Capital Trading Group in Chicago, stated today regarding the current wheat futures situation, “The wheat crop in Australia suffered through a pretty severe dry period this year.”  Riordan added, “Specifically the wheat crop out in eastern Australia has been in steady decline due to the lack of rain.”

The technical trend of wheat futures is indeed down, but I am trading the short side of this market with caution.  Please be patient for wheat futures to “break-out” in one direction, or the other.

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