Tuesday May 14, 2024

Where to now for prices?

CBOT Wheat prices were up a mind boggling 7.3% on the week to 670USc/bu. Since the lows of April 19th, CBOT Wheat and EU MATIF Wheat have increased by 26%. A massive short covering by funds has intensified a rally fuelled by Russian advances in Ukraine and weather challenges around the world. The question is where to now? While we forecasted the price direction correctly on the 15th of April, the rapid CBOT Wheat price rise has exceeded our 12-month forecast range…in 1 month. We believe the magnitude of the rise will be dependent on how much lower the Russian crop falls and how much headway Russia makes in Ukraine. If both factors plateau, the price rise should slow, and be limited by northern hemisphere harvest AND the fact that short positions by funds would be already liquidated.

 

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