Wheat futures have been trending higher for several weeks, and just as some analysts were predicting a peak, they spiked by 20 to 30 cents a bushel on Monday.

The possibility of Russia tightening phytosanitary requirements for wheat exports was a factor, says Lorne Boundy, a Winnipeg-based trader with Paterson Grain.

wheat_mature_heads“Lots of the concern today is surrounding Russia — phytosanitary restrictions and rumours that they may possibly impose export tariffs to keep some quality wheat in their country,” he explains in the interview below.

Fund-buying also played a role in the spike on Monday.

“As we approached the end of November, lots of the hedge funds and managed money had already started to form a net long position, and today it appears there were some big MOC (market-on-close) orders to buy wheat,” says Boundy.

Basis values in Western Canada will likely increase to soften the local impact of the futures rally: “Every time you see the futures go up, I’d be expecting the basis to widen out,” he says. “If the wheat futures start running, you’re going to see the country basis get crushed.”

Boundy discusses the factors at play in the wheat market and whether now is the time to lock in prices with RealAg’s Kelvin Heppner:

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