Wheat Hits 6-Year High

South American harvest could limit gains, says analyst

In the last month, the fundamentals for wheat have had a significant shift.

According to a report at Successful Farming, the dryness has continued in southern Russia, the major supplier for the world’s largest exporter. Farmers in that area have been slow to plant winter wheat and are holding back recently harvested supplies. But exporters’ aggressive forward sales during the summer must now be delivered, and the slow farmer sales are forcing exporters to source from deeper in the interior, driving up export costs and thus world prices.

The huge production expected from the Southern Hemisphere isn’t going to be so huge, but it will still be big and will show up in the world pipeline starting late this month. 

Export sales last week were a respectable 600,000 metric tons. Marketing year-to-date sales are 15.2 million metric tons, up 9% over last year and on pace to meet USDA’s projections.

Read the full analysis here.