...MOREThe market volatility that many traders have been missing, and was mentioned most lately by Cargill as a setback to profitability prospects, remains back in the markets.This time, it was the turn of the bulls to take control, after a previous session when bears had the best of it, helped by worries over huge hedge fund long bets spelling selling ahead, and somewhat by more benign US weather ideas.The hedge fund selling appeared to have a reduced influence this time, at least in early deals, although there was still some evidence of investors reacting to it.Protein premium…as in wheat, for instance.The woes of the US spring wheat crop - underlined by a further drop of 1 point to 34% in the proportion rated "good" or "excellent" by the US Department of Agriculture, in a weekly condition report overnight – would appear to dictate a strong premium for protein.(Spring wheat has a higher protein level than Kansas City hard red winter wheat which in turn has a higher level than Chicago-traded soft red winter wheat.)And indeed, Minneapolis spring wheat for September, in gaining 2.8% to $7.81 a bushel as of 09:55 UK time (03:45 Chicago time), pressed home its advantage of Chicago winter wheat, which added a more modest 1.2% to $5.12 ¼ a bushel.The Minneapolis premium of nearly $2.70 a bushel is well below levels around $1.00 a bushel or below which reigned until three months ago, when worries over dryness in the US northern Plains perked up.'Too long'However, Chicago wheat in turn performed better than Kansas City wheat, which added 1.0% to $5.11 ¾ a bushel – so falling into a discount despite a higher protein profile.This shift appeared a reflection of the fact that funds had built a record net long position in Kansas City wheat futures and options as of last week, compared with "just" a three-year high net long in Chicago.Benson Quinn Commodities mulled whether funds were "too long in Kansas City", although it did also mull whether shorts in Chicago may be increased too....
The last couple weeks action via FinViz: