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Commentary
In my view the one of the stories for today’s wheat rally is the Southern Plains’ dryness, but it is important to note that Chicago wheat is the last holdout with a short position by managed money funds. Wheat took off this morning and held strong gains into the close. A statement from Bank of America this morning said wheat futures have yet to feel the full force of the disruption of the Strait of Hormuz and the bank sees significant upside risks for wheat and corn prices. This, along with extreme high temperatures moving into the Plains this weekend, which has the possibility to further deplete soil moisture in HRW areas. In my view this has reignited significant speculative buying today. World cash markets though are relatively soft in my view and are not following the rally. The Southern Plains are forecasted to be hot and dry for the next 15 days, but this comes against the backdrop of a 900 million bushels carryout, which is more than comfortable. If the Bull continues to be fed. (Iran War and Southern Plains weather), we could see a continuation rally here especially if energy prices continue to rally. No trade recommendations today.
Trade Ideas-N/A
Risk/Reward-N/A
Sean Lusk
Vice President Commercial Hedging Division
Walsh Trading
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