Dry conditions in many global crop producing regions has decimated wheat crops, supporting the elevated prices in the wheat futures market and pushing a wheat exchange traded fund up about 21% in the past three months.
Teucrium Wheat Fund (NYSEArca: WEAT), the only pure-play wheat ETF available, surged 20.9% over the last three months. It’s one of the top ETF performers in the third quarter. [ETF Chart of the Day: Wheat]
In the U.S., the worst drought in half a century has decimated crops. Dan Manternach, agriculture director for Doane Advisory Services, believes that the winter crop in the U.S. Plains requires wetter conditions to establish itself, reports Rod Nickel for Reuters.
It isn’t just U.S. crops that are under duress. Drier conditions in Australian wheat-producing areas are also negatively affecting production. Russia, the world’s third largest wheat exporter last season, will cut down its wheat exports to 8 million tons this season, compared to 21.6 million tons last year, reports Marina Sysoyeva for Bloomberg.
“The bullish unknowns about the 2013 (wheat) crop are still there,” Manternach said in the Reuters article.