Wheat futures ended pennies higher amid ongoing short covering, and likely some measure of grain-soy spreading. World markets were again rather quiet and have been little changed, as evidenced in graphic below. EU, Russian and US origin wheat are within just $2-3/MT of one another, and the market is looking for fresh input. Algeria and Ethopia have issued new tenders, and how the executed prices compare to recent purchases will watched closely.
Dec CME & KC contracts, like corn, following this week are flirting with chart-based resistance. Amid funds’ ongoing sizeable short in Chicago, and newly established short in KC, a settlement this week above $4.39 will likely attract additional buying/covering interest.
But otherwise direction is lacking. Excessive rain will plague wheat quality in Brazil and pockets of Buenos Aires. Cold temps in the US next week will slow emergence. Black Sea weather, however, is highly favorbale. We also note that Russian shipments are showing signs of a slowdown, which is mostly seasonal, and with S Hemisphere surpluses down 7-8 MMTs this year, we advise against turning bearish on breaks.
