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Commentary
The funds keep probing for new lows and the end users aren’t getting in the way. The funds were quite active as they are estimated to have sold 5K today and 2K in KC. Today’s totals which brings the Managed Money short to its highest level in more than 30 days just ahead of the USDA’s WASDE on Monday. KC Wheat is now record short per CFTC at 72K approximately. Simply put, the funds have a hold on the market and refuse to exit until given a definitive reason. Headline out today suggests the US and EU are drafting a 30-day ceasefire for Russia/Ukraine, which is nothing new for the trade. It is my belief this proposal includes clauses for new EU and US sanctions against Russia if they refuse such a proposal. Crop scouts see good potential for the Southern Plains and the trade in my view predicts further improvement in the good to excellent ratings on Monday. There is some noise about disease concerns in Kansas, but the trade so far will sell the rumor and buy the fact on this story until something tangible and tradeable enters into the market. Technical levels for the record short KC wheat come in as follows for next week. Support is 514. A close under and its 5.03/5.00. A close under and it is Katy bar the door to 4.76. Resistance is 5.31. A close over and its 5.38. A close over both levels and we could see short covering that rallies the market to 5.59, unchanged on year and a key trendline.
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Sean Lusk
Vice President Commercial Hedging Division
Walsh Trading
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