Mercantile's Weekly Outlook:
According to Mercantile, futures markets are acting like they have found a bottom. Meanwhile, cash markets are being pressured by the volume of new crop wheat that is jostling for demand. Increasingly dry conditions in the Canadian prairies have the market on edge, says Mercantile. The next USDA report is out on Thursday. Traders expect the USDA will increase U.S. wheat stocks for ‘24/25 while lowering them for ‘25/26, while global ‘25/26 stocks are expected to be lower. Mercantile would not sell wheat for now.
Top Takeaways:
- Money managers in Chicago wheat futures and options decreased their net short position by 654 contracts to 100,572 contracts as of June 3, 2025.
- Markets are experiencing heightened volatility following Ukraine’s recent large-scale drone strike in Russia, which may indicate renewed tensions in the Black Sea region.
- Dry weather remains a concern in Russia and the EU, particularly in southern Russia, northern France, Germany, and western Poland. Despite ongoing drought conditions, Russian prices have decreased significantly as exporters prepare for a strong export program in the first half of their marketing year.
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