US futures rallied to modest gains, led by spring wheat futures, while the European market ended exactly unchanged. Interest in new positions is lacking ahead of clarification on summer weather pattern, and there still exists a battle between record old crop stocks and a substantial decline in inventories in 2017/18 crop year, assuming trend yields. Funds bought a net 2,000 contracts in Chicago and ARC estimates managed funds’ net short position today at 119,000 contracts, record large for late May.
A spark is needed to drive funds out of their sizeable short position. Weather moving forward will be key. However, as detailed in this evening’s wire, the longer term wheat outlook is turning a bit more supportive. Pockets of Europe & the Black Sea are too dry, and the expansion in wheat acres likely peaked in 2016.
The graphic at above shows CME futures valued in different currencies, and notice that revenue in major exporting countries is down from last year, sharply so in Russia. The US Gulf market remains competitive, and seasonal lows were very likely scored in late April.
