Wheat prices spiked near the end of May, but have since fallen to a year-to-date loss of 8.65%. However, prices could get a bullish spark especially if global weather conditions continue to deteriorate.
The consequences of those harsh weather conditions have resulted in major financial loss, according to The Guardian. Combined with a global food crisis, this could be a momentum driver for wheat prices moving forward.
“Violent weather cost the world $2tn over the past decade, a report has found, as diplomats descend on the Cop29 climate summit for a tense fight over finance,” The Guardian reported. “The analysis of 4,000 climate-related extreme weather events, from flash floods that wash away homes in an instant to slow-burning droughts that ruin farms over years, found economic damages hit $451bn across the past two years alone.”
Of course, the harsh weather is also negatively affecting wheat producers. In the U.S. for example, gloomy forecasts for wheat production are projected in the next year due to not only harsh weather, but also rising costs amid low prices. As such, producers are finding it hard to churn out a profit.
“The early outlook for the 2025-26 winter wheat crop is concerning, with only 38% of the national crop rated good to excellent,” noted Morning AgClips. "While western states are in better shape, Montana is lagging. Despite strong export forecasts for the current crop year, producers are pessimistic about the future due to low projected prices and high costs, making profitability difficult. Many will rely on crop insurance to break even. Global wheat production is also threatened by dry conditions in major exporting countries.
Buying the Wheat Price Dip
While it’s difficult to project when wheat prices will take a turn, investors who remain steadfast can continue to buy the dip. To that end, exposure to wheat prices is available with 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 short-term traders to gain exposure to the price of wheat futures. Furthermore, they can use the fund to get exposure to wheat futures without having a margin account. Investors with a long-term horizon looking to add wheat to their portfolio as a diversification component can use WEAT.
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