In short-term I think wheat is ready to return to balance price.
Positive factors:
+ soaring global ethanol demand;
+ prospects of lower crop inputs in the face of falling profitability;
+ strong recovery in global feed demand (USDA hiked by nearly 11m tonnes to 144.4m tonnes its forecast for world feed use of wheat in 2016-17. That's the second highest figure in record);
+ increased investor interest on return to multi-year lows;
+ price dynamics (I believe wheat is still in balance and expect it to return to the most accepted price of 475);
Negative factors:
- inventory forecast at a record high (253.7 tonnes);
- strong dollar;
- strong El Niño episode may point to a 2016 winter wheat yield above trend, possibly well-above, and a two-thirds chance of the average spring wheat yield to be modestly above trend;