Wild, Wild Wheat Trade Overnight!
Wheat: Chicago Wheat futures traders have had an exciting morning so far, with a surge in the last 90 minutes of the overnight session sending prices for the December contract to an new all-time high of $783 ½. Though no specific news seems to be responsible for the move, traders remain nervous over world Wheat ending stocks, with the Australian Wheat crop now forecasted to be in the 20 to 22 million metric tone range. However, rainfall has been light again this season, and many traders fear that this estimate may be overly optimistic once the harvest begins. Iraq has issued a tender to buy 50,000 of Hard Wheat this morning. At the end of the overnight session, December Wheat was trading at $7.81 ½, up 23 cents.
Stock Index Futures: The roller coaster ride for index traders continued this morning, as September e-mini S&P 500 futures gave back a portion of yesterday’s 27.25 point gain ahead of this morning’s release of the next preliminary estimate of 2nd quarter U.S. GDP. Expectations are for an increase to 4.1% versus the previous estimate of 3.4% growth rate, due mostly to a narrower-than-expected trade gap in June. In early trade, September e-mini S&P 500 futures were trading at 1457.75, down 7.75.
Dollar Index: September Dollar index futures were strong in early morning trade, as the seven major CME currency futures were all trading in the red after the Bank of England announced that it loaned 1.6 billion pounds at the penalty rate of 6.75 %. This news continued to stoke fears that the recent credit crunch is far from resolved, sending currency traders to safe haven buying of the U.S. Dollar. In early trade, September Dollar Index futures were trading at 80.96, up 0.32.
Mike Zarembski, Senior Commodity Analyst
