The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
Kevin Van Trump has over 20 years of experience in the grain and livestock industry.
Wheat continues to build a bullish storyline, but until we see some type of confirmed technical turnaround (a close back above $6.80), it will be tough getting much muscle behind us. We definitely have a storm building out on the horizon with the US balance sheet tightening; more "quality" downgrades out of both the US and Europe; talk of Brazil, Egypt and China looking for more wheat; and maybe most importantly the Russian crop looking much smaller than originally anticipated. From what I heard, Lanworth just reduced its 2013 Russian wheat crop estimate down to 48.4 million metric tons...keep in mind the USDA currently has the Russian wheat crop estimated at 54 million metric tons.
It’s expected that Brazil will soon be in the US wheat market as they are dealing with very tight old-crop supplies. You see, Parana (where nearly 50% of Brazil wheat is produced) has recently suffered a freeze and is making millers increasingly nervous about supplies. From what I understand end-users in Brazil are beginning to call for an increase in wheat imports to satisfy demand. Let’s also not forget fears of the wet spring here in the US causing lower quality Soft Red Winter wheat, sparking supply fears.
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