I have no idea why, nor can I find anything current on crop reports or supply/demand factors that makes immediate sense to someone like me who doesn’t follow the grains markets closely. But wheat (tracked by the ETF, WEAT) is making a 1-yr low, and I’m in there buying.
Do your Due Diligence.
Sounds like a smart investment…doc
Which countries produce the most wheat globally? | World Economic Forum (weforum.org)
Because Russia and Ukraine are both significant global wheat producers, the ongoing conflict between the two countries has caused massive disruptions to the global wheat market.
Doc,
The supply disruptions caused by the US-Russian conflict are well-known and should have been causing wheat prices to hit new highs, not tag one-year lows. That’s what I couldn’t find info on. But a chart is a chart. So that’s what I traded off of, rather than a chart plus fundamentals, which is my preference.
Arindam
I agree with your thought process. It makes no sense when Russia and Ukraine are two exporters of world wide wheat. Wheat should not be bouncing off lows and it seems like a smart call to buy into WEAT…doc
edit: I was bouncing the purchase of WEAT off the boss and she said maybe wheat is going down because low carb is the current thing and the number two carb being avoided is flour. Just a thought.
Doc,
Do you bake? All wheat flours have been in short supply since Spring '19, with there sometimes being none on the shelves. Ditto pasta. For pasta, I’m paying half again more than I used to and for flour, nearly double.
As commodities get priced, very little of that price increase --unfortunately-- goes back to the farmer. It’s mainly the processors and transporters that are benefitting. But “the market” should be reflecting through its pricing the constrained supplies of nearly everything that is being impacted by covid, by the Fed’s printing, by rising oil prices, etc.
I said to her that bread prices are up, flour is used in cake, pasta, cupcakes yada yada still the low carb thing is real in my world and a thought…doc
" I was bouncing the purchase of WEAT off the boss and she said maybe wheat is going down because low carb is the current thing and the number two carb being avoided is flour. Just a thought".
Doc,
Demographics matter. Most of America hasn’t bought into the low carb nonsense, nor have they suddenly discovered they are gluten intolerant. They have pancakes for breakfast, or toast with their eggs, sandwiches for lunch, etc. In fact, since covid began, wheat consumption is probably up as the work-at-homers rediscovered the joys of baking bread,
As one of my son’s friend’s wives said to him over a dinner he was hosting, “If I hear about about one more recipe for sourdough starter, I’m going to scream.”
Arindam