Wheat Futures Higher on Russian Drought Issues

A Moscow, Russian-based consultant to the government claimed yesterday that the average wheat crop yields in their country are expected to drop over 1.8 metric tons per 2.5 acres – from just over 2.10 metric tons the year prior – because of drought.  Not to be taken lightly as Russia is the third biggest exporter of wheat in the world.

The claim is cited after drought this month in the Urals and Siberia where some wheat fields were completely lost.  All estimates for Russian wheat harvest are being lowered significantly across the board.

Drought is the word this summer and not just here in the states. Russia has had to lower estimates for wheat yields as well, given their extreme heat,” said Chris Hildebrand, vice-president of trading at HighGroung Trading Group in Chicago, regarding the current wheat futures situation.  Hildebrand added, “Even if we get any sort of moisture it is not going to really help.”

Wheat futures up-trend remains intact despite the recent, and brief, sell-off.  I am patiently awaiting more of a pull-back in wheat futures for a lower-risk trade and better buying opportunity.

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