The bulls may have finally ran out of "rabbits" to pull from their hat.
From a production standpoint, there is a tendency for the US crop to get bit large between the May and June USDA report. There is also a belief inside the trade that the worst production "headlines" are behind us.
Yes, the HRW wheat crop has run into a few production hiccups, and yes, some areas in the Southern Plains have been devastated, but it seems as if the trade is comfortable with a crop of around 750 million vs. what many had been thinking could drop to sub-700 million just a few weeks back.
Point is the US "production" story looks like it has ran its course.
On the flip side the "demand" story isn't anything to write home about either.
As I have said the past few weeks’ wheat is simply priced too high in relationship to corn to gain much feed attention. And now that things have calmed down a bit, or should I say the trade has become more callused and comfortable with the situation in the Black Sea, US wheat exports aren't gaining as much interest.
Let’s also not forget EU and Russian wheat has seen improving weather conditions as of late and Canada is still sitting on a massive record wheat harvest from last year.
Bottom-line, without the "buzz" of geopolitical risk and some type of NEW production concern or headline in regard to a major global provider.
We just don't have enough horsepower to pull ourselves back up the hill.