Soft commodities market is one which deals in eatables and cereals like wheat, coffee, sugar, soybean, cocoa, corn, livestock and fruits. The term, soft commodity is used to refer the things that are grown in fields. These are basically the agricultural products. These are different from hard commodities like gold, copper, iron, etc. as they are mined instead of being cultivated. The production of soft commodities is completely in the hands of human beings whereas the hard commodities need millions of years to form and generate. The soft commodities, however, sometimes can have fewer yields as they may get damaged due to various other factors like bad weather, hurricane, drought or pests. This increases the market price of such commodities temporarily.
Weather is the main factor for good or underrated production of soft commodities. Wheat, one such commodity is finding it tough to counter the weather. It is facing different problems in different parts of the United States. There are varieties of wheat cultivated in different parts of the United States. North-Eastern United States cultivates Chicago wheat whereas the northern US is famous for Minneapolis Spring wheat. Kansas and other parts produce hard red wheat variety whereas durum and milling wheat are other varieties cultivated in the United States.
All the varieties of wheat are facing some or the other issues all over the country and this has threatened to have low production of wheat this summer. Heavy rains and thunderstorm is predicted in the coming days in Alberta which may significantly damage the wheat crop of the region. Most of the parts of the United States is reeling under drought like condition and the rise in temperatures is also not a good sign for the cultivation of wheat.
When the US winter wheat will come to the market along with the wheat from other major world producers, this wheat will find it tough to get going in the market. The direct impact was seen on the US grain futures market where many crops including wheat were hit hard in previous weeks. As soon as the forecasts were made by the Met department about the possible drought and dry, hot weather in most parts of the US, the price of these crops rose steeply. The Speculators increased their bought positions which led to a temporary surge in the price of the wheat crop, but the prices have since fallen continuously. As the rains started, the rainfall was more than the expected forecast which led to the fall in the futures market.
The wheat futures reached its lowest levels since April 2004 earlier in the previous week. The next few days saw wheat futures closing at lows continuously. The wheat however, is predicted to gain in coming days and the US exports is also predicted to rise giving it an impetus. The possible loss in the wheat production in the United States could have affected the wheat sales all over the world and the wheat prices would have soared high.
The wheat and other soft commodity market need a constant checking on the led stock ticker if the investors want to save their money.
The led ticker tape keeps the investors updated about the rising or falling price of US soft commodity market. These financial tickers had shown the declining value of the soft commodities continuously for more than a week and finally the wheat’s value is on the rise now. The soft commodity market needs more attention so one should keep on tracking the values shown on the stock ticker. It also needs the investors to keep a keen eye on the weather conditions all over the world and other issues that may affect the value of the soft commodities.