According to Mercantile, the Funds are carrying a large short position in wheat, but there is nothing currently in the mix to push them to reverse this. Mercantile expects prices to be lower as pressure continues from the U.S. corn harvest. Further forward, Mercantile sees firmer levels when the harvest is in the bin. Weak local currencies will keep prices low for the present while the Russians continue to be aggressive sellers of wheat. Mercantile notes, world events are extremely volatile at present and suggest a degree of caution. It should be kept in mind that there is a short crop in Canada and prices don't carry any war risk premium according to Mercantile.

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