USDA Outlook Halts Recent Wheat Futures Climb

Wheat futures retreated briefly today, actually the most in the past week and a half of rallying.  The USDA made an official statement saying record global production last year left so much extra in inventories and claimed wheat prices would continue to drop into next year.

The USDA economist also claims even as wheat plantings declines just over 1%, wheat prices for the domestic variety will average $5.30 per bushel beginning in the new fiscal year June first.  That’s about 20% minimum change from $6.65 to $6.95 per bushel forecasted in this current period.

Matt Zeman, a senior commodity broker at Kingsview in Chicago, had this to say regarding the current wheat futures situation,The USDA report demonstrated that wheat supplies are more than adequate following last year’s output and that even in spite of decreased wheat planting this year average prices are likely to see a significant drop.”  Zeman added,The supply/demand scenario appears to be finding equilibrium at lower (wheat futures) price levels.”

The trend for wheat futures is clearly up with our first uptrend trade starting one week ago today.  This is the time of year when wheat futures top out, and descend into early summer, but too early to tell of any signs of topping.

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