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Wheat Futures Rebound from Six-Day Low

October 19, 2017 at 16:43 by Andrew Moran

Wheat prices are edging higher on Thursday, rebounding from six-day lows. Any gains in wheat prices were capped by surging supplies, particularly in the Black Sea region, but US supplies have failed to attract substantial global demand.

December wheat futures rose $0.0425, or 0.99%, to $4.3425 per bushel at 16:29 GMT on Thursday on the Chicago Board of Trade (CBoT). Wheat prices have rebounded from their lowest levels since October 12. Year-to-date, wheat has tumbled more than 7% and has collapsed from its one-year high of $5.50 in July.

Investors are combing through domestic data that found a decline in market share for US wheat in Egypt, the world’s biggest importer of the commodity. The US Wheat Associates, a trade group, also announced that it is shutting down its office in Cairo after four decades.

Moreover, US producers are having a tough time trying to contend with other wheat exporters, including Algeria, Argentina, and France, which are expected to ramp up inventories ahead of January deliveries.

Domestic wheat supplies have come under pressure in recent months amid difficulties in garnering international demand. Analysts say that the issue is that Black Sea producers are attracting global buyers because of immense supplies.

Looking ahead, industry observers note that prices could rebound even further as there is low volatility occurring in the market.

Benson Quinn Commodities said in a report:

I [cannot] rule out the December trading below the [current] level, but the fact that it will [not] break below the current consolidation range has me starting to believe the market is cheap enough to cover needs.

It sure feels like the market finds some interest near the current levels or the sellers are respecting the fact that market will [not] plunge to new lows.

Other commodities are rallying towards the end of the trading week. December sugar futures rose $0.0011, or 0.78%, to 14.19 cents per pound. December coffee futures surged $0.027, or 2.17%, to $1.2700 a pound. December soybean futures climbed $0.0275, or 0.28%, to $9.870 per bushel.

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