Wheat Futures Extend Lows on Less Feed Use

Wheat futures touched lows not seen in over a year as speculators feel livestock producers will abandon wheat for feed use and switch back to corn for their animal feed.  As of this writing, corn futures shaping-up to see their biggest annual drop in price in over five decades.

Last year livestock producers bought more wheat for feed because of the abnormal spike in prices of corn.  This year, however, corn futures have plummeted over 35% reaching a multi-year low only yesterday.
Barb Levy, chief director for Futures & Options Xecution’s futures division in Chicago, had this to say regarding the current wheat futures situation, Wheat futures are seeing pressure due to the large corn harvest that is expected. Farmers are selling their harvested wheat to make room in storage for the upcoming corn harvest season.”

The trend for both corn futures and wheat futures is down with no bottom yet in sight.  I would prefer a significant pull-back before initiating any new short position, but will still be on the look-out for a lower-risk entry into corn futures & wheat futures.


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