Wheat futures ended mixed, and on the week CME & KC contracts lost 24-30 cents but spring wheat ending unchanged. Fund selling has paused, and fundamentally, ARC continues to trim major exporter production, as evidenced by our updated Canadian outlook. Ukrainian wheat yields so far have been disappointing, and without improvement the USDA’s forecast may be lowered another 1-2 MMTs.
We also mention that, seasonally, a fairly lasting bottom should be posted in the next 1-2 weeks. The graphic attached displays the seasonal change from July 1 in interior Russian cash prices. Russia’s domestic market is up slightly this week, and in recent years a bottom has been found by late July/early. There’s also a fairly strong tendency for Russian cash prices to rise 6-10% from Aug to Nov. The point is that already Russian origin is the world’s cheapest high quality milling origin, and exporters won’t have to work hard to find demand.
Funds in the US are near flat, and so production loss is required to sustain rallies. But with Canadian, Ukrainian and Aussie crops all getting smaller, we advise patience with respect to extending sales.