U.S. Wheat Associates says wheat prices since late December 2021 have bounced up and down so far in the new year. The ongoing tension between Russia and Ukraine is a big factor adding uncertainty and volatility to the wheat market. Both countries are major grain exporters, and the market knows that any disruption there could quickly impact supply.
Another factor in the significant volatility is commercial futures. The managed money funds take quick profits that pressure the market. However, speculators also appear to be bullish in their wheat outlook primarily because of ongoing weather challenges. Moisture is needed to put the winter wheat crop on a good footing, which means the weather will remain a driver in the wheat market.
Railroad performance is another obstacle as, since December, railroad logistics have slowed down. All grain shipments during the week ending January 15 were 11 percent lower than in 2021. Weekly rail traffic was down seven percent compared to last year.
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