Liquidation across commodities means trend-followers have to buy wheat futures. As usual the CBOT ramps up more quickly than MGE or KC...compressing the hard wheat premiums.
No evidence anywhere of improvement in the actual market for wheat. In fact, the stronger USD will eventually pressure wheat futures here as US wheat is still not very competitive on world markets. Also, the KFC Double-Down could indicate a drop in wheat demand. Then again, maybe Wendy's will counter with a "bread bowl" for their chili...
We are up around 40 cents from the recent lows in wheat and that has squeezed the front month MGE premium down by about 8 cents and the KC premium down by about 6 cents. All in all, not too surprising on such a rally and the rally may not be finished. While I am very confident in our July 11 long hard wheat/ short soft wheat position, I don't see it moving in our favor anytime soon.
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