U.S. Harvest Outlook in Reconsideration for Wheat Futures

Wheat futures found early support in today’s trading session following yesterday’s plummet following the USDACrop Production report.  The reason for the abrupt halt to the initial wheat futures slide is the fact that there are prospects for declining domestic production versus rising world supply.

The USDA reported yesterday US wheat output may be down slightly more than previously reported last month, but the bigger issue is domestic output is now estimated to be 8.8% less than this time last year.

The USDA shocked the market by lowering US wheat production estimates. Conditions in other producing regions are expected to more than offsetting lower expectations from the US,” said Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, regarding the current wheat futures situation.

The trend for wheat futures is now clearly down.  I expect a pull-back higher in wheat futures prices soon and will await a lower-risk opportunity to short this market.

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