The performance of Teucrium Wheat (NYSE: WEAT) has continued to impress keen stock traders, earlier on Friday. The premarket saw a continuation of a strong bullish trend, carried forward from the last two days. This upscale in growth magnitude comes after a successful month of staggering growth for the stock nearing 53%. Just last week, the WEAT story was widely shared across various platforms reaching a 53-week high in share price. Market bulls describe WEAT as having high financial value, given broader developments across the globe. Tensions in Europe appear to be the fundamental driver in this phenomenal swing. Furthermore, its growth, which has been three times that of crude oil is sending the market towards a ‘rush’.
Global Wheat Supply Disruptions & Inflationary Pressures
These gains in WEAT prices are linked to disruptions brought about in the global wheat supply amidst the Russia-Ukraine conflict. Both countries account for a combined 29% of the global wheat supply, triggering a shoot up of wheat futures prices. As Russia continues to capture strategic port cities across Ukraine, the export of this crucial commodity continues to face threats. With Ukraine close to logistical incapacitation, and Russia severely sanctioned, the future of wheat supply looks bleak, creating a market-wide frenzy.
Wheat futures prices were soaring at record highs well before the armed conflict in Eastern Europe. Global inflationary pressures following coronavirus-related economic disruptions further swelled wheat prices. Just within a year, prices saw a hike of 40%, creating panic among consumers, and creating demand for wheat futures. Alternatively, bulls in the market see opportunity within the crisis, as a means to gain exposure to these price climbs.
Opportunities for Traders seeking Exposure to WEAT Futures Growth
Moreover, with European stocks continuing their downward spiral, investors are increasingly looking towards strategic diversification of their portfolios. Commodities, unlike other financial securities, tend to show relatively less risky behavior in times of crisis. The agricultural industry, in particular, is a lucrative option, given the volatilities seen in the oil and gas sectors.
Each of these broader concerns highlights why the market is seemingly rushing to get its hands on wheat futures. Teucrium Wheat, an ETF dealing specifically in wheat futures offers this exposure and security to market participants. As uncertainty regarding the future supply of global wheat continues to become a concern, the purchase of wheat futures continues. The significant volume of trade seen in the previous hours is a strong indicator of this.
