Reuters reported French wheat sales to Latin America-Brazil, Peru, Mexico, Venezuela. Ouch. With the USD up and the Euro down at 1.35, wheat will have to drop further to price itself into export markets.
With the price of wheat falling on this dynamic, the contangos steepened and we added to our exposure there-positioning for over-supplied US grain elevators. And the CBOT dropped more than KC and MGE and we added to our position there as well.
With "non-commercial" shorts at near record levels, I would usually be quite averse to adding risk as the bearish trend continues. But the 800 lb. gorilla that is passive index longs is not going to take this wheat and not going to use it. So each day this trend continues we are just seeing the CBOT market grind down toward physical, "real" valuations.
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