Other than a price spike during the month of May, bullish wheat investors have yet to see any major gains, but rising wheat prices in Russia amid a larger global food crisis could provide some tailwinds for the rest of the year.
Russia is one of the top global producers of wheat, but climate and other market-related pressures prices higher according to Finimize. If dry weather persists, that could bode well for bullish wheat prices though farmers are “particularly anxious about winter wheat conditions, which could affect future yields.”
Russian research firms are already forecasting a drop in exports for the next year, which is already evident in the current data. Furthermore, it’s not just wheat prices that are being affected, but other grains as well.
“Wheat exports have noticeably decreased from past weeks, with a significant drop reported,” reported Finimize. “Sovecon has cut its Russian wheat export forecast for the 2024/25 season, citing adverse weather. Meanwhile, Rusgrain is advocating for limits on low-price exports amidst an expected reduced harvest. Domestically, prices for various commodities, like wheat and sunflower seeds, are climbing, while the Agriculture Ministry plans to reassess its crop forecasts.”
As mentioned, this also points to the larger issue of global food concerns and Russia’s disrupted wheat supply could change import and export strategies globally.
“As a top wheat exporter, Russia is pivotal in global supply chains,” Finimize added. “Ongoing weather issues and market changes could prompt a reassessment of worldwide grain strategies. With domestic price hikes and policy reviews looming, global economic strategies regarding food imports and exports might see major shifts.”
Get Concentrated Wheat Exposure
Wheat prices are still down 3% year to date, but with ongoing weather concerns not just in Russia, but worldwide, it could be an ideal time for wheat exposure. That said, consider using the Teucrium Wheat Fund (WEAT ). With the current prices, investors can buy into the weakness, thereby taking advantage of prices ahead of future upside. If supply constraints elevate wheat prices in the future, it’s an ideal time to purchase the commodity.
WEAT offers an easy way for investors to gain exposure to the price of wheat futures in a brokerage account. Long-term investors looking to add wheat to their portfolio as a diversification component can use WEAT. Short-term traders can use the fund to get exposure to wheat futures without having a margin account.
For more news, information, and analysis, visit the Commodities Channel.
