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Wheat Futures Plummet as Commodity Selling Weighs on Contract

June 1, 2017 at 16:56 by Andrew Moran

Wheat prices are plunging on Thursday as commodity selling is weighing on the contract. A new government data report found that the winter wheat crop in Kansas is in poor condition. Whether this will affect wheat prices throughout June or not remains to be seen.

July wheat futures plummeted $0.0775, or 1.81%, to $4.215 per bushel at 16:39 GMT on Thursday on the Chicago Board of Trade (CBoT). Wheat prices have tumbled about 20% over the last 12 months. Year-to-date, wheat futures are down more than 2% and have pared most of their early 2017 gains.

US wheat supplies may take a hit for the rest year. According to the National Agricultural Statistics Service (NASS), a quarter of Kansas’s winter wheat crop is in poor to very poor condition. The report further highlighted that 30% of the state’s wheat is rated in fair condition and 38% is marked as good. The paucity of high-quality wheat stems from the damage that occurred from the hail in northwestern Kansas. The recent spring crop has also impacted some of the winter wheat supplies.

Meanwhile, broader and widespread selling in the commodity market is having a greater effect on wheat contracts. Despite a better-than-expected May for the commodities market, traders are already beginning to reverse the trend on the first trading day in June.

A climbing US dollar is also sending wheat futures lower as the greenback is up 0.24% on Thursday. A surging US dollar makes commodities more expensive for foreign investors to purchase. This fact was iterated by Commonwealth Bank of Australia analyst Tobin Gorey last month as a strong dollar has been imbibing away at US competitiveness.

Corn is also unable to rally towards the end of the trading week. July corn futures dipped $0.04, or 1.08%, to $3.68 a bushel. Corn prices have remained about flat year-to-date.

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