Wheat is one of the most important agricultural commodities in the world. It is consumed by billions of people every day. It is produced in many countries, with the main producer being Russia which produces more than 60 million metric tonnes per year. It is followed closely by the United States and France which produce more than 55 million and 39 million metric tonnes per year.
This year, wheat futures have been among the best performing agricultural commodities in the world. They have surged by almost 20%. The price could continue moving up as supply for the commodity declines. In Russia, the dry weather in the southern growing region has made it difficult for the crops to grow. Cold and soggy conditions in areas of Siberia and Urals have also contributed to this. The Russian Grain Union expects this years’ crop to shrink by more than 21%. In Russia, the wheat winter is usually harvested in July and August while the spring crop is usually planted in May.
The US Department of Agriculture (USDA) has released numbers expecting the crop to shrink for the first time in six years.
Wheat is currently trading at $514 a tonne. This is close to the highest level since July last year. The current price is slightly lower than the 100-day moving average and is slightly lower than the important support shown below. In the next few days, the price of wheat could continue to move up as traders increase their bullish bets. As such, the pair could move above the YTD high of $554.