It took all of about two weeks of 2001 to leave in tatters what some hoped would be bull markets in Chicago Board of Trade corn and soybean futures. Now traders are looking to wheat for upside leadership, but there are doubts about whether it can lead a bullish charge on its own.
So far this year, Board of Trade March corn futures are down 7 percent and March soybeans have slumped 6 percent. By contrast, March wheat is still showing a gain of 2 percent.
Statistically, world wheat supplies in 2000-01 are the tightest in decades. U.S. wheat carryout is projected to fall 136 million bushels from 1999-2000, the biggest one-year drop since 1991-92. And U.S. winter wheat seedings were the lowest for 30 years.
All that was enough to push CBOT wheat prices to three-month highs as recently as Jan. 11.
Speculators already have embraced the bullish outlook for wheat. As of Jan. 16, data showed commodity funds and small speculators had amassed sizable net long positions in both Chicago and Kansas City Board of Trade wheat futures.
Without a fresh incursion of bullish news, those speculative longs could become an anchor.
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Gregg Hunt, with Fox Investments in Chicago, said CBOT March wheat would face a “gut check” if prices bleed 6 or 7 cents per bushel from current levels, toward the 50-day moving average.
Exports for the final months of 2000-01 will be crucial.
In the week ended Jan. 18, only 8 million bushels were loaded for export. Shipments are running 7 percent below a year ago.