Commodity Blog

Commodity news, technical and fundamental analysis, market data on precious metals, energies, industrial metals, and soft commodities


Supply Concerns, Bargain Buying Help Wheat Futures Jump 1%

June 15, 2017 at 16:45 by Andrew Moran

Wheat futures are climbing higher towards the end of the trading week. Supply concerns, weather forecasts, and trader bargain buying are helping the commodity make major gains on Thursday.

July wheat futures rose $0.045, or 1.025%, to $4.475 per bushel at 16:28 GMT on Thursday on the Chicago Board of Trade (CBoT). Wheat prices have taken a beating over the last 12 months as they have cratered nearly 20% and have risen just 3% year-to-date.

Traders are performing a round of bargain buying as wheat futures are trading at one-month lows.

Prices are going higher because of growing supply concerns, particularly in the US, where weather conditions are hampering crops. According to the US Department of Agriculture, wheat condition ratings are lower than expected as just 45% of crops are good to excellent. It is also estimated that crops are approximately 10% smaller than in the previous year.

Forecasts suggest that some rain could happen in the US Plains, which is welcome news for the region since additional moisture is necessary to enhance the condition of crops. The warmer winter weather helped wheat grow quickly earlier this year and catch up to normal growth points.

Wheat prices have been gradually tumbling over the last five years. In 2012, wheat prices reached as much as $8.90 a bushel, but has been on a downward trend ever since then.

Any gains that wheat was able to generate were capped as the US dollar surged higher on Thursday. The greenback increased 0.57%. A strong US dollar is bad for commodities like wheat because it makes it more expensive for foreign investors to purchase.

Corn, meanwhile, has been unable to rally. July corn futures slid $0.0225, or 0.60%, to $3.747 per bushel. Sugar is also slipping on Thursday as the sweetener has fallen $0.01, or 0.73%, to 13.52 cents.

If you have any questions and comments on the commodities today, use the form below to reply.

Leave a Reply