USDA Boosts Wheat Ending Stocks, Adding To Pressure
Falling prices could get worse.
Bryce Knorr
Published: Oct 12, 2008
Wheat prices continued their collapse last week, making losses in the stock market seem like child's play. For the record, Chicago nearby wheat has lost 58% of its value since all-time highs were made in March. Minneapolis has lost even more, falling a stunning 75%.
It's not the type of record anyone wants, and it could get worse in the days ahead. After failing to hold various support levels last week, wheat prices again are on the precipice of further declines.
While wheat has attempted to muster rallies in recent weeks, the combination of fund liquidation in other markets, a stronger dollar, and increasing global production have torpedoed that effort. USDA added fuel to the fire on Friday, raising its estimate of June 1 stocks to a bearish 601 million bushels. I continue to think exports are stronger, thanks to dramatically low shipping rates and weak basis. To read Bryce Knorr's complete weekly wheat review, click HERE.
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