Key facts
- AgResource Company notes wheat market stabilization.
- Funds hold a sizable short position in wheat.
- US winter wheat harvest is expected to bring seasonal supply pressure.
- The wheat market will need to ration forward export demand by maintaining a premium to forward markets.
AgResource Company has provided commentary on the wheat market, noting that it is the first of the major agricultural markets to stabilize. The firm reiterates its view that the US winter wheat harvest, which will bring seasonal supply pressure, will occur and pass quickly. Unlike corn, the wheat market will need to ration forward export demand by maintaining a premium to forward markets. AgResource also observes that funds hold a sizable short position in wheat. The Commitment of Traders report showed another massive week of managed money selling in the agriculture markets, with funds selling 187,515 contracts across 10 key ag markets. The fund net long position fell to 647,853 contracts, reflecting liquidation of nearly 467,00 contracts in the last week.