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Commentary

Wheat markets traded mostly lower in what was an uneventful session today with some strength seem the first hour of trade followed by mostly sideways action.  US winter wheat harvests advanced 16 points this week to 53% complete. Some areas of concern have popped up due to wet weather. With some parts of the ECB and Southern Plains showing low falling numbers and test weight, some of the speculator crowd took note and reduced their net short. That said prices still finished in the red as wheat got no help from weakening corn, bean, and meal values. In my opinion end users are likely to remain patient in my opinion with little urgency to get wheat booked until something changes to suggest prices will move higher. Perhaps we will see some light short covering ahead of Fridays WASDE numbers. The market though is not expected to see significant changes to supply and demand numbers from USDA in my opinion as harvests move forward for the winter crop. That said it maybe reason to look for a turnaround at some point for KC versus Chicago wheat. KC is trading 25 cents under Chicago in the September contracts and carved out a new multi-year low on the spread. Call me for levels here. WASDE reports are good excuses sometimes for an unwind or profit taking from recent trends. We will see if KC can gain on Chicago and reverse the recent trend into Friday.

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Sean Lusk

Vice President Commercial Hedging Division

Walsh Trading

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