Winnipeg,(MarketsFarm) – United States wheat futures have climbed higher over the past week, with the largest gains in Chicago Board of Trade soft wheat, as global uncertainty over the COVID-19 pandemic provided some support. However, that uncertainty could also makes predicting market trends rather difficult, according to an analyst.
“All of my comments come with a caveat that any given headline could change everything,” said John Weyer, director of commercial hedging with Walsh Trading in Chicago, adding “we seem to be getting those frequently.”
Wheat is showing the most strength of the grains and oilseeds, with the May Chicago contract rising by about 80 U.S. cents per bushel off of its lows to trade above US$5.70 per bushel on March 25.
“Nobody seems to be too concerned about how many carbs they’re eating,” said Weyer, on the increased retail demand for pasta and flour that was finding its way to support the futures.
Stimulus measures introduced to counter the negative economic impact of COVID-19 were also supportive, according to Weyer, with production issues in France and the Black Sea region also underpinning wheat values.
He expected the May wheat contract would face resistance in the US$5.80 to US$5.90 per bushel area, with a pullback to US$5.50 a possibility before the market takes another run higher.
However, “we’re in uncharted territory,” and Weyer noted that any fresh news could easily tip the grain markets one way or the other.
Strength in the U.S. dollar could also sway the markets, with the rising currency making U.S. grains and oilseeds less attractive for international buyers.