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 bulls are finding it harder and harder to remain positive as recent headlines start to age and India confirms the fact it is reducing its wheat export price to $260 per ton, a price that many bears argue will quickly boost India's net exports. Remember, India has not been a significant "exporter" of wheat in several years. In fact last year they exported less than 1 million metric tons, now all of a sudden they become the worlds "low-cost" provider. Just as I was afraid of, some folks are backing off their recent production downgrades for the Australian wheat crop. Lanworth yesterday actually raised its estimate for the 2013/14 Aussie crop to just under 25.3 million metric tons. There is also starting to be more talk amongst the bears that the USDA may have their global wheat feeding estimate too high, considering how long wheat has stayed at a major premium to corn this year. On a more positive note there is talk circulating that the USDA's current 2013/14 estimate for Russian wheat might be 2-3 million metric tons too high. There is also some bullish chatter coming from the fact Brazil raised their tariff-free wheat import quota by 600,000 metric tons. The bulls are saying Brazil wouldn’t make this move if they had any hopes of sourcing the wheat from Argentina. Just keep in mind its only 600,000 metric tons and it could be sourced from Canada or other non-US suppliers (bullish yes, but not insanely bullish). Bottom-line, its tough to get overly excited about the wheat market without NEW headlines continuing to stream across the wire. Remember, the bigger the bull...the more frequently it needs to be fed.
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