Welcome to the bulk food market news update.  The wheat market continued its downward slide last week.  Wheat is facing a number of headwinds.  Wheat is still relatively expensive relative to corn which reduces the amount of wheat used for animal feed thus lowering overall wheat demand.  Europe, Eastern Europe and the Black Sea have all experienced a warm, wet winter which has wheat crops looking in good shape.  However, with limited snow cover a severe cold blast could cause crop damage.  On the positive side, U.S. wheat won a tender from Egypt indicating that U.S. wheat is becoming more competitive on the global markets.  Looking at the charts, we see that wheat is sitting right at the major weekly support (the black line).  If the market makes a clear break of this price level, we could see a push down over the next few months to the $4.50-$4.25 area.  Barring an unexpected event, weather or otherwise,  wheat is unlikely to sharply turn around in the short term.

The corn market could not sustain the bounce received after the surprising January crop report lowered the 2013 harvest.  However, there are positive developments in the corn market.  Argentina, the third largest corn exporter, has experienced a major heat wave over the past few weeks.  The estimates for the Argentine corn crop have been lowered from 32 million tonnes to around 20 million tonnes.  Furthermore, due to strength in the soybean market in the U.S., analysts estimate that corn farmers may shift acreage from corn to soybeans in 2014.  In looking at the charts, we see corn is still hanging on the the monthly trend line.  If corn has a clear break of the trend line, the next major monthly support is in the $3.25 area.

Purchasing bulk food as a tangible asset is not like trading a financial asset.  You will not catch a bottom perfectly.  The best approach is to start layering in purchases for the long-term while prices are lower.

Check out the articles below for a more comprehensive look at the bulk food market news.  Contact us at sales@bulkfoodinternational.com or 816-833-8062 and we can help you get started investing in bulk foods as a tangible asset you have possession of, instead of just a piece of paper.  You can download a copy of our product catalog here.

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