Supply Estimate Concerns Raise Wheat Futures

There is an outlook that the USDA may soon lower its global wheat supply estimates in the very near future.  Dry weather is reportedly damaging wheat crops in wheat growing regions around the world, and that sent wheat futures higher for a second day in a row.

Just today Russia has lowered its estimation for grain exports, while Australia also reduced its harvest projection last month.  Other analysts are saying even the USDA‘s “northern hemisphere” wheat harvest estimate provided last month will be just over 2% lower.

Christian Moreno, a commodities broker at HighGround Trading Group in Chicago, stated today regarding the current wheat futures situation, “Wheat (futures should) move higher once we get through harvest.  Fundamentals look strong and we are oversold.”  Moreno added, “We are setting the stage for higher (wheat futures) prices after harvest.”

Wheat futures have been trading absolutely sideways for better than two months now, albeit after a substantial uptrend has taken a break.  I remain cautiously bullish wheat futures with rather tight stops in place.

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