Prices 17/8/18

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Good US weekly export sales of wheat helped their futures markets to recover overnight. With weekly wheat sales pencilled in at 803kt it was 300kt above the highest trade estimate. Corn futures were also helped with export sales of US corn achieving 1.2mt. Soybeans saw a mixed bag of news with some good export data being countered by news that China picked up 5 boats loads out of S.America.

The big news was the closed door deal Cargill made with Iraq for 300kt of US and Canadian wheat. Iraq buys wheat both by means of international tender and private negotiation. This 300kt follows the recent purchase of 50kt of Australian wheat. Values for the sale last night were said to be around US$334 CIF.
Currently we see Aussie values at around US$282 FOB west coast, a jump of around US$8.00 from prices earlier in the week. Even at this value Australian wheat may well have been competitive into Iraq if the purchase went to tender. This may indicate that east Australian wheat values may have some further upside in the short to midterm.

Sorghum offers out of the USA are around US$187 FOB Texas. This would represent a value relevant to NNSW of roughly AUD$270 NTP Newcastle. Currently we are seeing values closer to AUD$390 for new crop sorghum. As a rough guide the difference between export and import parity is about AUD$150. So we are pretty close to where we should be given the season, maybe $30 under. Don’t be greedy.

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