Wheat futures rebounded and closed near the top of its daily trading range as funds covered a portion of their recent shorts. EU wheat cash prices are a bit weaker as stocks there build and the need to find export demand is getting urgent. French farmers are worried that their stored stocks will soon need to move. Sagging EU wheat prices adds another layer of competition for Black Sea offers
The attached chart reflects 2017 world wheat export stock/use ratios. Notice that exporters have plenty of supply to sell/export in coming months. And if normal weather impacts non US growing areas, that that ratio will rise even more in the new crop year.
The message is that US price rallies are totally tied to domestic new crop production threats and declining stocks. However, a Black Sea weather/crop problem is needed for Chi spot futures to rise too far above $4.60. The biggest impact on the Plains dryness will be KC wheat gaining on Chicago. ARC research sees wheat holding in a trading range until there is a real threat to Russian or Ukraine wheat produciton.
