FxWirePro: Expect wheat price to decline thanks to surplus production

The latest report from International Grains Council (IGC) suggests that the world is heading to a surplus wheat in 2018, despite some recent setback due to weather. This year, global production of wheat would reach 767 million metric tons, higher than the initial estimate of 757 million metric tons, thanks to higher Russian production. Canada’s wheat production is also expected to be higher than estimated. The consumption, on the other hand, is expected to be 739 million metric tons, pushing carryover stocks to a new high of 273 million metric tons.

In addition to that above, the ongoing trade battle between the United States and the rest of the world, especially China is set to adversely affect the U.S. wheat prices.

Trade idea:

Sell Wheat future at the current rate of 515 cents per bushel, and at rallies with a target of 435 cents per bushel.