(Bloomberg) -- Wheat futures bounced, clawing back some of this week’s losses, as renewed supply woes and investor profit-taking helped lift prices from recent lows.
Contracts for September delivery of the grain used to make crackers and pastries jumped as much as 3.9% to $5.5625 per bushel in Chicago, before trimming gains.
A slew of reports that raised supply concerns — from a delayed harvest in France to a reduced production forecast in Germany and excessive dryness in Canada — helped propel the market higher on Friday, counterbalancing the outlook for ample global supplies this season.
The move was amplified by investors exiting some of their bearish wheat wagers after the commodity approached the lowest level in nearly four years earlier this week, according to Arlan Suderman, Chief Commodities Economist at StoneX Group Inc.
“How sustainable is it? I think it’s yet to be determined,” Suderman said in a phone interview, referring to the rebound.
US farmers still have a lot of wheat to sell, which can limit the upside for the market, he added. “We have to be braced for the possibility that this rally could be quickly sold unless we see a more significant weather story unfold,” he said.
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