Wheat Futures Seeing Lower Demand

After two-months of rallying, wheat futures have sold off rather sharply in the last three commodity trading sessions.  Have substantially high wheat futures prices reduced demand for American wheat…?  This is a good question as the USA remains the world’s biggest exporter of wheat.

Well it seems Russia has been underselling their wheat lately as both Egypt & Ukraine recently purchased 60,000 metric tons for an average $313.44 per ton as USA’s Cargill was trying to sell their wheat supplies for $344.53 per ton.  At this price differential, it seems our domestic wheat supply just isn’t competative.

Bret Aaron, head of trade operations for Global Futures Exchange & Trading Company’s Managed Futures Division in Encino, CA, stated today regarding the current wheat futures situation, “International importers continued to tender wheat through October as the market becomes concerned with rising grain prices going forward and the potential for lower export volume out of the Black Sea next year.”  Aaron added, “Better rainfall in the Black Sea, Southwestern Australia, and the (American) Midwest also pressure wheat (futures) as dry soil conditions saw marginal relief which should benefit wheat planting for next year’s crop.”

The trend for wheat futures remains up with no top yet in sight.  I am looking to go long wheat futures once again soon on the next lower-risk opportunity


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