Now is the time to go long wheat prices

Tim Hornibrook commented that “crop prices are starting to look cheap given the cyclical potential for a supply side event that negatively impacts supply”. Mr Hornibrook said that “the potential for a supply side event in one of the major crop growing areas coupled with the fact that the 15/16 season should see reduced production driven by the current low crop prices, should see investors looking to take long positions in wheat”.

Tim Hornibrook further commented that “while a second world record crop in a row has pushed world wheat stocks as a % of use well above the key level of 20%, consumption is also rising by over 10 million tonne annually. While we would need to see a drop of over 50 million tonne to see levels drop back to 20%, production has shown it can drop by more than 30 million tonne in the past.”

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