Winter wheat contracts took out early week losses in one day on Wednesday, on MGX/KC spreading, cash market strength for HRW and short-covering of CME wheat. Funds liquidated an estimated 6k contracts of CBOT wheat yesterday, as the net short sits around 135k contracts and could be one facet of strength if there is a large round of liquidation of positions. Weekly export sales fell short of estimates at 377 TMT, a decline from the previous week but above last year. Morocco purchased 260 TMT of U.S. HRW in a tender yesterday, which is the second similar tender in the last couple weeks. Cash markets received good support yesterday, as gulf values for ords, 11.0 and 11.5 picked up to cover recent sales. There should be a round of improvement for milling bids, and it is likely to give some definition to OND and JFM interior values. Look for a continuation of the wheat strength, but export sales were not as impressive as most would have expected.
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