MGEX wheat was the best performer on a continuation of the wheat rally. Commercial demand? Noise? Who knows...
No shortage looming for Dec CBOT as that stayed a full 39 cents under March. Correct me if I'm wrong, but all the grains from Corn to Wheat to Oats are at 80%+ of full carry. This is a striking contrast to markets like sugar, cotton, cocoa, ethanol, gasoline, milk... Taking corn as an example, I think bulls can take comfort in the low stocks/use ratio and attribute the nearby spreads to a function of the US (vs world) harvest and storage situation and pin hopes on the shape of the more deferred futures curves which bends towards backwardation.
Outside of the wheat market, next week's Federal Reserve actions/announcements could have a big impact on all commodities. Personally, I can't imagine a Fed Chairman whose entire career is built on the idea of expansionary monetary policy disappointing markets on the scale of QE2. Should investors rush into commodities, we could see CBOT gaining more than the less actively traded KC and MGEX--just something to bear in mind.
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