Wheat is a unique crop, in that it is grown and consumed in every arable region of the world. But all that production and demand also means wheat is one of the most competitive commodities to grow and most challenging to gauge market direction.
Darren Padget, past chair of U.S. Wheat Associates, says that all eyes are on Russia and Ukraine when it comes to exports, as supply from the Black Sea region can significantly put downward pressure on wheat prices. Australia also seems to have decent yields on the way, he adds, which doesn’t bode well for wheat prices to breakout of the current range-bound pricing.
Significant changes in the U.S. political scene continue to rev up the U.S. dollar, Padget adds, which could price U.S. crop out of the market. However, it only really takes one major event somewhere else in the world to push the wheat market higher.
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