Wheat prices and related exchange traded funds weakened after the U.S. government announced higher-than-anticipated supplies. However, poor weather conditions around the globe could still support global prices.
Teucrium Wheat Fund (NYSEArca: WEAT) was down 0.8% Wednesday after dropping over 3% Tuesday.
In the U.S. Department of Agriculture’s monthly crop report, the USDA calculates that U.S. wheat stockpiles at the end of the crop year next May will be a greater-than-expected 754 million bushels due to lower wheat exports, which the government agency projects will drop 4.5% this year, the Wall Street Journal reports.
Wheat futures dropped 3.2% Tuesday and continued to drip 1.2% Wednesday.
“It just kind of snowballed on itself,” Jim Gerlach, president of A/C Trading Co., a Fowler, Ind., commodities brokerage, said in the article.
Analysts did not expect the USDA to make such a large cut in the exports forecasts.
“That caught people off guard,” Chad Henderson, president of Prime-Ag Consultants Inc., a commodity brokerage, said in the article. “Everyone has been expecting, myself included, that we’re going to start getting some export business.”