Wheat futures ended steady to slightly weaker amid limited fresh market-specific news. The USDA this morning estimated 2018 US all wheat stocks at 931 Mil Bu, vs. old crop stocks of 1,009 Mil, amid reduced imports, slightly higher feed use and lower carry in supplies. This AM’s balance sheet lacked any surprise, and it’s back to watching Plains dryness and, increasingly, excessive rainfall across the Delta & Southern Midwest. SRW crop health will deteriorate if heavy rain persists into early March. Monthly US crop ratings are due late next week.
Managed funds in Chicago on Tuesday were short a net 67,000 contracts, up 10,000 on the prior week. As evidenced by the graphic attached, this is still the second largest net short on record for mid-Feb. Fundamentally, wheat rallies are based mostly on US weather, but we do mention Russian interior cash prices are testing recent highs at $165/MT, vs. $157 two weeks ago, and that it’s tough to be overly bearish amid rising world grain markets as a whole. Supply dislocation is needed to sustain any lasting bull move, but we caution against selling breaks as the US corn balance sheet tightens, albeit slowly. Still no precip is offered to the W Plains through mid-March.
