WASHINGTON — There has been a recent bump in wheat prices. Even with lower acreage, continued poor crop progress reports and a delay of what could be a trade war with China, some analysts say there is no justification to this latest wheat rally.
“I would kindly disagree with that,” said Mike Zuzolo from Global Commodity Analytics. ”I think that we are probably looking at a wheat yield number that is about 3 to 5 bushels less than USDA’s May figure for 2018-19 wheat.”
Zuzolo said that, until the last couple of weeks, the markets really haven’t given the attention to the poor/very poor conditions in the major hard red wheat producing states.
“Those conditions have shown no sign of improvement throughout the month of May and we are getting into a critical time when a rain may not do much good,” Zuzolo said. “So I think the market is accurate in pushed prices higher.”
The one problem Zuzolo does see with the spike in wheat prices is that now Gulf prices of soft red wheat are well above prices offered throughout the rest of the world.
“That hurts the potential for our demand,” Zuzolo said. “That will be an issue unless there is an issue in Eastern Europe or Australia with their wheat production, which has yet to be seen.”
ABOUT GLOBAL COMMODITY ANALYTICS
Headquartered in Atchison, KS, Global Commodity Analytics & Consulting LLC is as technologically advanced as many offices in cities such as Chicago and New York, with state-of-the-art trading software and real-time quotes. Get a fresh perspective on your grain and livestock marketing plans. Sign up for Mike Zuzolo’s FREE 2-week newsletter trial at www.GlobalAnalytics.biz
–Global Commodity Analytics & Consulting LLC