Mercantile's Weekly Outlook
While wheat markets do not look exciting to Mercantile because the demand side remains tepid and hard to define for the coming crop year, they do note that there seems to be room for high protein wheat once again. In the ongoing crop year, demand for good quality protein wheat confirmed good demand for Canadian wheat. This year, we see German wheat come in with lower pro than normal, while once again seeing quality concerns with French wheat, and some concerns with Russian wheat. Mercantile says this will not fuel a change in overall price trends for wheat but should support a good premium for high quality/high pro wheat in the markets and support demand for Canadian product (all assuming we get off with good quality). Mercantile will be watching out for occasional premium selling opportunities.
Top Takeaways
- For the wheat markets, the USDA report was basically a non-event, and the market reacted lower.
- Late on Thursday, President Donald Trump announced a 35 per cent tariff on Canadian goods starting on Aug. 1, 2025. It is generally thought that this excludes USMCA compliant products, so it does not affect grains at this point.
- We note that Matif made gains last week, and if COT data is to be believed, then the market is made up of a Fund short on one side, and a commercial long on the other.
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