Can We Believe What We See in the Three Wheat Markets?
Heading into the weekend, the best quote I can come up with to describe the wheat sector comes from the Winston Churchill’s comments on Russia, “It’s a riddle, wrapped in a mystery, inside an enigma”. There is an obvious connection between the topics of Russia and the wheat sector, though I’m not on the same bandwagon as those who still talk about how bullish the latter is fundamentally since Russia invaded its neighbor and sovereign country Ukraine. I’m not going to get into the politics, that’s a subject for a different forum, but it is likely in the back of the minds of traders as they make their way to local watering holes this Friday afternoon.
What I want to focus on in this piece is the difference between technical and fundamental analysis in all three markets. To set the stage, the latest round of CFTC Commitments of Traders report (legacy, futures only) showed noncommercial interests held net-short futures position in all three markets: 46,410 contracts (Chicago SRW), 10,550 contracts (Kansas City HRW), and 8,430 contracts (Minneapolis HRS). Recall these positions were as of this past Tuesday, September 5.
