After spiking to a high above $7 per bushel on June 1, September wheat futures tumbled nearly $2 throughout June and early July.
Joe Victor, vice president at Allendale, says we’re heading into a demand phase for wheat. “Because of the influence on corn, there’s a bottom side potential for September wheat futures to find [their] way down to a level of $4.85. There’s fairly good resistance at the $4.70 level and then again at $5.85,” he says.
Andrew Waldock, principal, Commodity and Derivative Advisors LLC, says wheat is near a low. “The crop size is going to be a little lower than last year because we don’t have as much acreage planted. We’re expecting two billion bushels this year compared to two and half billion last year.”
Waldock adds that expectations of a 15% drop in Russia’s production adds support for wheat. “None of this is going to cause major problems, but it should help find a bottom. We’re in a seasonal trend where it’ll start getting higher into the first week of September,” says Waldock, who expects September wheat to go back towards $6.25 to $6.50.
Victor says dry weather pockets in Ukraine and Russia may lend some support to U.S. wheat prices.