Market Morsel: The highs and lows of the wheat market.

Market Morsel

Markets are always in flux. They go up, and they go down; they don’t really stay flat for very long.

There is an element of seasonality, which we have spoken about regularly. The middle of the year is when the bulk of the world’s crops are produced, and that can bring with it heightened volatility.

In this short piece, we look at when the highs and lows were in the wheat market.

In the first chart below, the middle of the year is highlighted in grey, along with dots representing the highest-priced month of the year (grey) and the low points (hot pink).

On average, the highest prices for wheat futures arrive in June, and the lowest are in August.

The second chart below shows the five-year moving average for the same data, and shows typical expectations of highs and lows around the middle of the year.

I heard someone the other day saying that farmers are scared of volatility; however it can bring opportunity.

The middle of the year is make or break for the crop.