Wheat futures ended the day and week mixed, with July MGE finding a new contract high and with winter wheat futures lower on profit taking. The highlight this evening is that funds covered a net 62,000 short positions in Chicago (the second biggest move on record), and funds are now short just 21,000 contracts, the lowest since late 2015. With funds no longer excessively short, actual weather conditions across the N Hemisphere will play a bigger role in price discovery.
Plains wheat yields remain highly mixed, but better than expected in many areas of KS. Protein, however, continues to be a bit disappointing at or just under 11%, which will only exacerbate North America’s shortage of high quality supply. Dry weather will persist across the Dakotas and Saskatchewan into July 4.
Heat is still forecast to transition eastward into the Black Sea region by early next week and the EU model has trended much drier in Western Europe through the next 10 days.
A pause in the rally is likely as the market reacts to today’s fund position data, but fundamentally major exporter production is in decline. End users should look to extend coverage on any test of $4.70, basis Sep KC.
