Wheat Futures Finding Support with Chinese Dry Weather

A prominent weather forecasting company says wheat growing regions of China’s northern plains may be “drier than normal this winter,” which could lead to crops being dependent on springtime precipitation.  Both hard-red wheat, and soft-red wheat initially rallied on the news today.

The senior meteorologist went on to say the main Chinese wheat-growing regions have little chance to see the freezing temperatures needed to damage crops that are normally dormant during winter months.  China is the world’s number one wheat consumer and is reported to have committed to importing almost 4M metric tons of US wheat this marketing year (as of Sept 26th).
           
Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, had this to say regarding the current wheat futures situation,In my opinion, wheat complex is going to move higher because Argentina is having problems with crops.  China is in the market buying and strong cash prices in the US will keep prices high.”

Wheat futures’ trend is up and the seasonality of this market extends to late in the calendar year.  We are long both of our wheat contracts at this time.

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