Speculators continued to get more bearish on wheat as forecasts see crops as more than ample. Prices on wheat futures have collapsed from $744 to $576, or $5.76 per bushel. Traders are betting that wheat prices will continue to decline, holding the most net-short contracts since mid-February.
Global wheat inventories are expected to reach three-year highs just prior to the 2015 harvest. The US Department of Agriculture reported that global inventories would reach 188.61 million metric tons by next May. According to data from the Commodity Futures Trading Commission (CFTC), net-shorts quickly increased on wheat have hit 40,436 contracts in the week ending on June 24, opposed to the 28,942 short contracts seen in the week earlier.
“The downside risk is greater than upside risk at this point. Barring any kind of summer woes, things look pretty good,” said Christopher Narayanan, head of agricultural research at Societe Generale. Wheat futures have already declined 17 percent this quarter, and prices are expected to decline further to $5.71 per bushel.