Low wheat supplies from other countries will cause the US wheat futures to go up this week. Russia, one of the main exporters of wheat, has been suffering from drought conditions that have dropped estimates of this year’s harvest. Russia’s Ministry of Agriculture estimated that 80-85 million tons of grain will be harvested which is relevantly small compared to 94 million taken in last year. Argentine wheat production also will fall sharply this season because farmers planted less due to export quota. 2012/13 wheat production, which will be harvested next month, will be 10.12million tonnes, dropped by 28percent from 14million tonnes produced last year. Furthermore, Ukraine’s Ministry of Agriculture announced that an export ban on wheat will come into effects from November 15. Ukraine concerns that stocks are becoming more scarce on the domestic market due to poor harvest. Therefore, I expect that more demands of wheat will be shifted to the US market and then US wheat futures will rise. Wheat futures will pull corn futures high, but corn prices will change depending on up-date information of USDA on the supply and demand of wheat and corn. Thus, I will take long position of wheat and corn this week and I will offset both short wheat positions on the first day before the rally in wheat futures come.
http://www.businessinsider.com/the-worlds-biggest-wheat-exporting-countries-2011-4?op=1
http://rbth.ru/articles/2012/07/29/russia_to_cut_grain_exports_by_half_16793
Hi cindy!
Yes we have same decision for wheat! Like you mention, due to drought US, Ukraine export quota, and Russia’s unsatisfied harvest support wheat price will increase this week. Also I think depreciated US currency would affect increasing demand and price. As well increasing oil price would affect the commodity price to go up. I hope our prediction would be alright! Have good night!!and get well~~
Thanks for your comment!
As i already left my comment on your blog, i hope our prediction for wheat will be right!
See you soon!