US weather dominant headline for global wheat markets
May 18, 2017
US weather has been the dominant headline for global wheat. Combine the late April snow storm with record speculative short positions held in CBOT wheat futures and the result was a short covering rally of some magnitude.
Prior to this, wheat derivatives had been somewhat lethargic, with CBOT July wheat futures making new lows in April, closing below 420c/bu on the back of burdensome global supplies. The ensuing rally tested the 460c/bu level however, the higher values could not be held with the extent of crop damage being questioned.
The US futures rally and subsequent fall had little impact on local old crop pricing ideas, with the domestic trade focused on covering near term shipping shorts.