Wheat Still Well-Supported

Wheat finished within a few cents of its recent highest closing price. No 5-10% sell-offs in this grain. So it is relatively easy for CBOT wheat futures to stay well bid vs KC and MGE--speculators continue to buy the CBOT product.

Alternatively, the VSR may be having a more profound effect than I anticipated. While I expected the large storage charges to discourage buyers from holding CBOT wheat, the large incentive to store physical soft wheat may have created a relative scarcity of Soft Winter Wheat. For the past few days, the DTN index of Soft Winter Wheat has been about even with their index for Hard Spring Wheat. Apparently, if a grower has on-farm storage, he is just holding back the soft wheat to pick up the carry. Hmmm.