Six hundred and seventy two, that’s how many days since Chicago nearby wheat futures last rallied more than 20c / bushel in one session. Yep, back on the 30th of June 2015. We’ve waited a long time. Sure we’ve seen sessions slip by more than 20c between then and now but we all like to forget them. The million dollar question now is how sustainable is this.
Funds have been busy selling wheat to a record short position and this weather event in the US has managed to spook them just enough to get them to start unwinding this short. We all know they make money out of volatility so it’s in their interest to push the market lower than it should be. So potentially it may be in their interest to push it a little higher than it should be too.

It’s prudent we pull up for a reality check though, there’s a whole bunch of wheat in the world, so even if there was a foot of snow in some parts of  Kansas and some frosting on the wheat that wasn’t covered in snow and some flooding on the soft wheat in the US, it’s starting to sound good isn’t it. The reality is that this may spur US values much more than global values. Those that do the occasional US futures swap may watch closely and wait for this to be an opportunity. Those that forward contract physical may also donate some basis to the trade if cash bids become attractive but will world values rally and stay higher, only time will tell.