The wheat market hasn't exactly the place to be over the last few weeks, with other contracts stealing most of the spotlight. But Chicago July futures were especially active heading into options expiration Friday and first notice day Tuesday. And there at long last signs the tortured basis in the soft red winter wheat market was finally ready to turn.
To be sure, wheat faces more downside at harvest ramps up. Hot weather on the Plains ripened wheat fast, with hedge pressure seen last week. But quality remains a concern in both hard and soft wheat, which should help firm the cash market sooner, if not later.
With Chicago December trading above full carry, producers with storage and markets into winter should roll hedges and just sit on the grain. Those with no hedges in place can rely on crop insurance and the potential for significant basis strengthening into winter.
Check out the Weekly Wheat Review.
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