While the financial press continues report on the continuing weather challenges concerning wheat in major producers like Russia and Canada, the question must be asked as to how long that will be able to offer support to wheat futures, which have finished their fourth straight week in gains.
Damage in Russia is real, and Canada to a lesser extent as well, but that has to be taken in light of the global wheat planting and harvest, and like in past years, it has been enormous, and that hasn't changed in any way in 2010.
Over the next several weeks, a growing number of analysts and traders are expecting wheat to fall in price, to as low as $5 a bushel by the middle of next month, and possibly more.
Weather-related damages happen every year, and every year reports give a boost to prices temporarily, until the market catches on that there is plenty of wheat available in other regions to make up for it.
For example, this year there is a bumper crop in the United States, and that will contribute a lot to the price of wheat in the near future.
Many other smaller countries have also started to increase wheat acreage over the last several years, and that has played a big part in imports and exports around the globe, and will continue to going forward.
Bottom line is, it won't matter what happens in Russia and Canada, as there will be plenty of wheat for the world to consume, and after this brief period of higher wheat prices, we'll see them start to go down ahead in the near future.
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