Unintended Contract Activity on Wheat Markets

The wheat market has seen some renewed movement, driven by weather concerns and shifting market precipitation. Bryan Doherty, vice president of Brokerage Solutions and senior Market Advisor with Total Farm Marketing weighs in on a recent uptick in unintended by the contract activity and what it signals for the market.

"There's a lot of unintended buy contracts lately in wheat. And what I mean by that is if you are a seller of wheat, the trader of wheat, this thing has been down, down, down, every rally has failed. So you are short or sold the market. As the market starts to turn. If I'm a trader, I'm like, well, but I don't want to get caught up into some rally. So you put a buy stop above the market. That's means you're stopping your sell risk. So if the market starts to move, it triggers these buy stop orders. That's. Unintentional because that wasn't the original plan. The original line was to be sold. But this is how you get outta the market quickly. You have these buy stops, and then they get triggered, and that it further exacerbates the upturn."

So that's what we've seen in the wheat and the bean markets here in the last 30 days in particular. Once again, that was Bryan Doherty, vice president of Brokerage Solutions and Senior Market Advisor with Total Farm Marketing.