A wheat ETF climbed Wednesday, with soft red winter wheat futures rising to their highest level in over seven months, and broke through a key technical barrier on weather concerns over crop growth in the U.S. plains.
The Teucrium Wheat Fund (NYSEArca: WEAT) gained 8.5% year-to-date and jumped 2.8% Wednesday, breaking back above its 200-day simple moving average. Meanwhile, CBOT wheat futures were up 3.6% to $4.9425 per bushel.
“The wheat market keeps moving higher on crop concerns in the hard red winter wheat area,” CHS Hedging market analyst Ami Heesch said in a research note, according to Reuters. “Dry conditions prevail in the Plains, for the next several days.”
The strength in the wheat market also pilled over into the corn segment, with the Teucrium Corn Fund (NYSEArca: CORN) up 0.8% and testing its long-term resistance. CBOT corn futures were 0.9% higher at $3.8275 per bushel and was trading near its highest since August 2017.
Weather forecasts project U.S. wheat growing areas are expecting more dry weather, which may further affect winter wheat crops in the area. The latest U.S. Department of Agriculture data confirmed ongoing damage from the dryness, with only 12% of Kansas’ wheat crop, the top wheat grower in the U.S., being rated in “good” or “excellent” condition, Xinhua reports.
“Wheat is again supported by worries about dryness in parts of the U.S. Plains and the impact of this on U.S. wheat conditions,” Graydon Chong, senior commodity analyst with Rabobank, told Reuters. “Badly needed rains in parts of the U.S. Plains are still absent especially in the Southwest.”
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