Commentary
More funds selling seen today with December Kansas City wheat putting a new low for the move and trading down to the lowest level seen since July of 2021. Ouch. Chicago and Minneapolis following that price action but lagging, as those contracts still trade above their late September lows.
It is my belief that managed money shorts have defended their position by adding to their position on rallies. Dec Kc wheat has lost approximately 40 cents (see chart) since last Friday morning’s short covering push higher. Funds continue to be rewarded for the short positions that they have on across the wheat complex. This market needs to see a round of demand to show up or a bullish headline to prod the funds to covering my opinion. Export sales are out tomorrow morning with trade estimates at 300 to 600k metric tons. Funds will be watching to see if any new China business shows up or is switched from unknown destinations. The ongoing Mideast conflict has not resulted in rising global prices amid a strong US dollar that continues to provide fundamental resistance on rallies in my opinion. If the down trend continues , I look for KC wheat to drift to 6.34 basis December, which represents 25% lower on year.
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