US wheat futures continued down the path of least resistance, lower. The overnight improvement in the value of the Aussie dollar isn’t helping any conversions this morning either.
Looking for a ray of light is a bit of a struggle this morning, but it does appear that EU durum values are on the increase. Rain in parts of Italy, increasing drought in Turkey and dry weather across N.Africa and Canada are all contributing to some upside in EU values this week.
Canada is forecast to see some storms today / tomorrow. This time of year these storms can be more of a hindrance than a help, often bringing strong winds and hail. The forecast generally suggests that these storms could be more north and east of the major durum belt too. Is it too late to sow durum here ??

Wheat is struggling due to a few major factors, both fundamental and technical. World production is expected to increase from the May / June estimates in the next round of major reports. Private analyst have increased Russian production to 83mt. The USDA currently have them penciled in at 81.6mt. There are parts of the Russian winter wheat area that have done it a little tough. This had initial forecasts a little lower, but the weather across the spring wheat region of Russia and Kazakhstan has been exceptional this year. Potentially countering the poorer outlook for parts of the winter wheat region, and then some.
The counter to the increase in Russian estimates will be the potential declines for the EU, Canada, Turkey, Australia and maybe even the USA. Dry weather is also starting to emerge as an issue for Argentina.
Currently we are not seeing the issues emerging in 4 of the 5 major exporters as a price driver. This brings us to the technical side of the market for those of you that still think there’s a correlation between futures and physical wheat. In the last CFTC report, June 17th, Managed Money was still short 153,430 SRWW contract, at 136t per contract you do the math. The short is reducing, one would assume that as long as it is reducing they would not want a rally.