Why Did Lower Export Sales Data Drag Wheat Prices Down?
How Did Poor Weekly Export Sales Data Impact Grain Prices?
Trend in wheat prices
March wheat futures contracts fell on February 11, 2016. Wheat prices fell below the crucial support level of $4.60 per bushel on February 11 after rising the previous day. The volume increased by 8.6% for the second consecutive trading day. The open interest fell by 12.4%. Prices continue to trade significantly lower than the crucial 20-day, 50-day, and 100-day moving averages of $4.71, $4.75, and $4.91 per bushel
The above chart shows that prices could be $4.65–$4.50 per bushel in the short term.
Price drivers
The lower consensus for wheat’s weekly export sales data dragged the prices down on February 11, 2016. The speculation of an early decision in Russia’s wheat export tax policy supported wheat prices in the near term. The US dollar depreciated by 0.28% on February 11. It supported the export sentiments.
Stocks review
The fall in wheat prices benefits food businesses. It reduces their production cost and increases their profitability. ConAgra Foods (CAG) rose by 0.05% for the third consecutive day on February 11, 2016. After rising for three consecutive trading days, J.M. Smucker (SJM) and General Mills (GIS) fell by 1.3% and 0.2% on February 11, 2016. Pilgrim’s Pride (PPC) continued the downward price movement. It lost the previous day’s gain. It fell by 6.4% on February 11, 2016. The Market Vectors Agribusiness ETF (MOO) fell by 1.5% on February 11. Wheat prices fell for the fifth consecutive trading day. It lost 4.3% in value during the period.
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