The wheat exchange traded fund is now testing its long-term trend line, with wheat futures trading on their worst back-to-back decline in 15-years, on speculation that rains will improve U.S. crops as global supply grows.
The Teucrium Wheat Fund (NYSEArca: WEAT) was down 0.9% Monday, dipping below its 200-day moving average. Since its May 6 high, WEAT has declined 8.9%.
CBOT wheat futures dipped 0.2% Monday, trading around $6.73 per bushel. Wheat prices are heading for their ninth consecutive loss, the longest back-to-back fall since Sept. 1, 1998, reports Jeff Wilson for Bloomberg.
T-Storm Weather LLC forecasts as much as 2 inches of rain will improve soil moisture for wheat crops in Texas to Nebraska starting May 23, alleviating some drought concerns.
“World supplies are very comfortable,” Shawn McCambridge, the senior grain analyst for Jefferies Bache LLC, said in the article. “Prices ran up too high, and now we are putting rain on crops that should recover some of their yield losses.”
Wheat prices have steadily decreased after the U.S. Department of Agriculture said May 9 that world stockpiles will rise 0.5% to 187.4 million by June 1, 2015 and President Vladimir Putin ordered Russian troops to back off the Ukrainian borders, easing tensions between Ukraine and Russia.
“Crops just about everywhere around the northern hemisphere continue to progress well,” one European commodities house said, Agrimoney reports. “The only problem is in the US but this has already been priced into current markets.”