As expected the punters used Russia to once again position themselves prior to selling wheat lower. This is starting to become an all too common occurrence which could create a problem once or if there is a development in Russia that is worthy of a reaction.
The risk of all the recent rumour activity resulting in a “boy who cried wolf” scenario is real.
Tunisia picked up wheat, barley and durum in a recent tender. Wheat values were a little higher but durum values were lower. This aligns well with current durum values in Canada which have begun to stabilise after recent losses. Yesterday cash values for CWAD1 13% in SW Saskatchewan were at C$210 per tonne ex farm according to PDQ.
India has increased the minimum support price for wheat and chickpeas. The new values are said to be set at 1.5 times the cost of production. The move higher equates to a 6% increase in wheat values to roughly AUD$340 / tonne and should make exports from India unviable. Chickpeas saw a rise of 5% to AUD$718 / tonne. Most see the move as a political stunt leading into the 2019 elections while others say it’s generally irrelevant as the state purchases are minimal and the domestic market usually trades under the MSP anyway.
France exports 41.6% of its wheat to Algeria. If Russia does gain access expect to see ripples through EU wheat values.