Wheat futures have been riding high over the last four weeks, but that seems about to end, even though weather conditions in Canada and Russia continue to cause problems for the grain.
The challenge for wheat, as it has been for years, is the increasing amount of acreage around the world being dedicated to growing the grain.
With that in mind, the inevitable bad weather in various parts of the world, while having a temporary impact on wheat futures' prices, overall level off and bring them back down to where they belong.
Until there is a move toward planting less wheat, which is unlikely any time soon, this will remain the way things are.
Heading into August, wheat futures will drop down to about $5 a bushel, or even lower.
Showing posts with label Wheat Futures Prices. Show all posts
Showing posts with label Wheat Futures Prices. Show all posts
Friday, July 23, 2010
Wednesday, March 10, 2010
Wheat Outlook Dismal on Supplies
Wheat Inventory High
Stockpiles of wheat are leaving the industry reeling even more, as the largest inventory in over 20 years is emerging from the heavy wheat harvest.
Projections are there will be close to 1 billion bushels of wheat in the warehouses and bins when the harvest comes in; 20 million bushels beyond the estimates of the USDA.
The already low prices will drop even lower, as farmers continue to plant the grain based on prices from several years ago, rather than prevailing market conditions.
This is expected to finally correct the over-planting of wheat as farmers look to other areas to generate profits, as wheat hasn't been doing it for a few years.
The reasons for wheat being so abundant is lower exports as many countries are planting wheat and getting good results, and American consumers aren't consuming as much, driving domestic demand down. That and just too much wheat being planted is the issue driving the huge wheat inventory.
Wheat Inventory High
Stockpiles of wheat are leaving the industry reeling even more, as the largest inventory in over 20 years is emerging from the heavy wheat harvest.
Projections are there will be close to 1 billion bushels of wheat in the warehouses and bins when the harvest comes in; 20 million bushels beyond the estimates of the USDA.
The already low prices will drop even lower, as farmers continue to plant the grain based on prices from several years ago, rather than prevailing market conditions.
This is expected to finally correct the over-planting of wheat as farmers look to other areas to generate profits, as wheat hasn't been doing it for a few years.
The reasons for wheat being so abundant is lower exports as many countries are planting wheat and getting good results, and American consumers aren't consuming as much, driving domestic demand down. That and just too much wheat being planted is the issue driving the huge wheat inventory.
Wheat Inventory High
Thursday, October 1, 2009
Wheat in Sixth Quarterly Drop
The sixth straight quarterly drop by wheat is the longest losing streak in a minimum of 50 years, as global supply far exceeds demand, continuing to put downward pressure on wheat prices.
According to USDA data, global wheat stockpiles have increased by 10 percent to reach 186.6 million tons during 2009-2010. Oveall production could reach as high as 663.7 tons, only behind last year's 682.3 million tons.
With many other countries focusing on increasing their own domestic wheat supplies, imports have plunged to 121.1 million tons from the 141.2 million tons at the same time last year.
As of mid-September, only 10.5 million metric tons of wheat, or 386 bushels was ordered by foreign buyers, a huge decrease of 36 percent from a year ago.
Wheat supply and prices - Wheat prices going down
According to USDA data, global wheat stockpiles have increased by 10 percent to reach 186.6 million tons during 2009-2010. Oveall production could reach as high as 663.7 tons, only behind last year's 682.3 million tons.
With many other countries focusing on increasing their own domestic wheat supplies, imports have plunged to 121.1 million tons from the 141.2 million tons at the same time last year.
As of mid-September, only 10.5 million metric tons of wheat, or 386 bushels was ordered by foreign buyers, a huge decrease of 36 percent from a year ago.
Wheat supply and prices - Wheat prices going down
Saturday, August 15, 2009
Wheat Futures Prices Near Term
Wheat Futures Prices
Wheat futures in the U.S. should continue to go nowhere for some time ahead unless something extraordinary happens where huge losses come about, which could probably only happen in Australia.
Production estimates for wheat continue to increase while demand decreases, cutting back significantly on wheat exports.
The USDA estimated 2009 U.S. wheat production was raised to 2.184 billion bushels from its July estimate of 2.112 billion, while the global wheat crop increased to 659.3 million tons from 656.5 million tons last month. The USDA's estimate for global ending stocks -- or what is left over after supply and demand are accounted for - also increased.
Wheat prices have plunged over the past year as global supplies have increased, and there is little sign of anything changing.
The continuing bearish information strengthened "the prevailing tone of the wheat market - one adrift in search of a persuasive fundamental storyline and dependant upon direction from other commodities," J.P. Morgan analyst Lewis Hagedorn said. "Absent a large decline in Australian production or demonstration of increasing global demand for protein wheat, prices appear likely to continue a gradual downward slide."
CBOT wheat will probably continue to experience new contract lows, although losses will be limited during the medium term by possible strength in CBOT corn and soybeans. Wheat prices should generally remain rangebound during the next couple of months.
Projections are it's possible September wheat could drop as low as $4.50 or December wheat to touch $4.75. The top end of the contracts' ranges should be about $5.25 for September, assuming a rally in beans and corn comes about.
A lot of negative things would have to happen across the world in order for any type of rally to happen, along with El Niño drying up Australian wheat fields, a continuing wheat disaster in Argentina, and an ongoing rain shortage in the Black Sea Region
But even with all of that happening, there's no surety, as the other places in the world have shored up their domestic wheat production, which is the real mitigating factor in the overall scheme of things.
At best there would be a mild recovery of wheat prices assuming all the above happens, but that doesn't guarantee the U.S. would be getting that business.
Wheat Futures Prices
Wheat futures in the U.S. should continue to go nowhere for some time ahead unless something extraordinary happens where huge losses come about, which could probably only happen in Australia.
Production estimates for wheat continue to increase while demand decreases, cutting back significantly on wheat exports.
The USDA estimated 2009 U.S. wheat production was raised to 2.184 billion bushels from its July estimate of 2.112 billion, while the global wheat crop increased to 659.3 million tons from 656.5 million tons last month. The USDA's estimate for global ending stocks -- or what is left over after supply and demand are accounted for - also increased.
Wheat prices have plunged over the past year as global supplies have increased, and there is little sign of anything changing.
The continuing bearish information strengthened "the prevailing tone of the wheat market - one adrift in search of a persuasive fundamental storyline and dependant upon direction from other commodities," J.P. Morgan analyst Lewis Hagedorn said. "Absent a large decline in Australian production or demonstration of increasing global demand for protein wheat, prices appear likely to continue a gradual downward slide."
CBOT wheat will probably continue to experience new contract lows, although losses will be limited during the medium term by possible strength in CBOT corn and soybeans. Wheat prices should generally remain rangebound during the next couple of months.
Projections are it's possible September wheat could drop as low as $4.50 or December wheat to touch $4.75. The top end of the contracts' ranges should be about $5.25 for September, assuming a rally in beans and corn comes about.
A lot of negative things would have to happen across the world in order for any type of rally to happen, along with El Niño drying up Australian wheat fields, a continuing wheat disaster in Argentina, and an ongoing rain shortage in the Black Sea Region
But even with all of that happening, there's no surety, as the other places in the world have shored up their domestic wheat production, which is the real mitigating factor in the overall scheme of things.
At best there would be a mild recovery of wheat prices assuming all the above happens, but that doesn't guarantee the U.S. would be getting that business.
Wheat Futures Prices
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