uploads///DecWheatTChart

Wheat’s Sharp Downward Movement Continued for the Second Day

By

Jan. 7 2016, Updated 7:04 a.m. ET

Trend in wheat prices

Wheat futures contracts for March delivery were trading near the crucial support of $4.70 per bushel on December 22, 2015. The fall in wheat prices sharpened the downward movement on December 22, 2015. The consecutive days of sharper downward movement might induce recoveries in a few days. However, it might not impact the direction of the change. Prices would continue to play below the key moving averages.

Wheat prices could be $4.65–$4.80 per bushel in the short run.

Article continues below advertisement

Price drivers

Fierce competition in the wheat exports market from Argentina, the EU (European Union), and Russia dragged wheat futures prices on December 22, 2015. The above average temperatures and forecast in the US Great Plains and Canadian Prairies would support wheat plant progress in the near term and drag prices down.

The depreciation of the US dollar by 0.25% on December 22 supported wheat exports.

Stocks review

The food businesses rose due to the fall in wheat prices. Their cost of materials fell. For the third, second, and second days, food companies Pilgrim’s Pride (PPC), Hormel Foods (HRL), and General Mills (GIS) rose by 1.8%, 1.1%, and 1.7% on December 22, 2015. They rose by 5.4%, 2.2%, and 2.6% during this period. After rising for a day, J.M. Smucker (SJM) fell by 0.02% on December 22, 2015. After falling for three consecutive days, the VanEck Vectors Agribusiness ETF (MOO) rose by 1.50% on December 22, 2015.

Advertisement

More From Market Realist

  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.