Wheat Posts Longest Losing Streak Since 1997: What It Means for Portfolios
Chicago wheat futures are on observe for a ninth straight weekly loss. The wheat dropping streak is the longest in additional than 29 years, erasing roughly 21% since early September.
Yet provide is tight, with the US winter wheat crop close to a 50-year low. That makes the selloff a geopolitical commerce, and the identical headlines are shifting oil, Fed expectations, and Bitcoin (BTC).
Why the Wheat Losing Streak Ignores a Shrinking US Crop
Barchart flagged the streak on October 28, although the ninth week turns into official solely at Friday’s shut.
Wheat peaked close to $7.65 per bushel on September 1. It now trades round $6.00, in accordance with Trading Economics.
Hopes for US-led Russia–Ukraine peace talks drive many of the decline. Traders anticipate Black Sea grain shipments to get better if a deal emerges.
Meanwhile, Russia is rerouting exports via Baltic ports, and Southern Hemisphere harvests are including provide.
Hedge funds held roughly 65,000 internet quick Chicago contracts this week, in accordance with DTN. Its evaluation sees the market as deeply oversold.
Is the Commodity Super Cycle Still Running?
Steve Hanke, professor of utilized economics at Johns Hopkins University, reads the yr in a different way.
However, the International Monetary Fund (IMF) window closes close to wheat’s peak. The similar report exhibits general commodity costs fell 6.3% from March to August.
The IMF additionally tied the wheat rally to Black Sea disruptions and European warmth, not Iran.
Adjusted for inflation, the IMF meals index sits close to its 2016 stage, properly under the 2022 peak.
Why Cheaper Bread May Not Bring Rate Cuts
US shopper costs rose 3.7% yr over yr in September, in accordance with the Bureau of Labor Statistics data. Energy jumped 20.4%, whereas meals climbed simply 2.5%.
Wheat barely registers on the checkout. Farmers obtain about 13 cents of a $5.99 wheat loaf, the National Farmers Union estimates.
The Federal Reserve held charges at 3.75% to 4% on October 28, after a September hike. Two officers dissented in favor of one other enhance, retaining Fed hike odds alive.
For inventory and crypto holders, oil moderately than grain stays the inflation variable to observe.
Emerging markets really feel meals prices extra instantly. In Türkiye, peer-to-peer crypto quantity rose fivefold to $3.56 billion, almost all in stablecoins used as greenback financial savings, Chainalysis reported.
Can 24/7 Crypto Markets Make Grain Shocks Travel Faster?
Wheat already trades on-chain. Developer commerce.xyz runs a wheat perpetual contract, a futures product with no expiry, on Hyperliquid.
It tracks the CBOT benchmark with as much as 20x leverage. Agrotoken, in the meantime, tokenizes bodily grain in Argentina and Brazil.
Still, tokenized farm belongings whole solely about $150 million, versus roughly $4.3 billion in tokenized gold, by trade estimates.
Friday’s shut will verify the streak, whereas Russia–Ukraine talks in early November might take a look at the peace commerce. As commodity perpetuals unfold throughout crypto venues, grain headlines might attain digital-asset merchants across the clock.
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