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Wheat Futures up 1% on USDA Report, Russian Hoarding

February 16, 2017 at 18:18 by Andrew Moran

Wheat futures are surging on Thursday. Wheat prices are being supported by a recent report from the US Department of Agriculture (USDA) and reports that Russian farmers are hoarding their wheat supplies. The commodity is continuing its strong start to 2017.

March wheat futures rose $0.06, or 1.32%, to $4.607 per bushel at 16:53 GMT on Thursday on the Chicago Board of Trade (CBoT). Year-to-date, wheat prices have surged nearly 13%, which is positive news for the commodity after plummeting in June.

The USDA published a report on Monday that found global wheat stocks estimates were slashed for the current season. For weeks, traders have feared reports that there would be a major supply glut in the coming months. One of the world’s largest wheat imports, Brazil, has recently exported one of the largest shipments of wheat thanks to a massive domestic crop and government subsidies.

In the short-term, it appears that supplies will not be as immense initially projected.

Wheat futures are also being supported by reports that Russia will postpone any action that would see its wheat producers flood the market with exports. Last year, Russia had maintained a record harvest, and with a stronger rouble, many believed that Russia would dump its supplies on the global market. Experts now say that Russian traders will wait for better prices and then proceed to ship its exports.

Investors will now look ahead to spring wheat accounts next month. This is when the biggest proportions of total wheat output occurs, particularly in Russia, Canada, the US, and Kazakhstan.

Corn is not joining the rally. March corn futures have slipped $0.03, or 0.79%, to $3.757 per bushel on the CBoT. Corn has also had a fierce start to 2017 as it has climbed more than 7% year-to-date.

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