Lower than expected US weekly wheat export sales kept a cap on wheat futures at all three US exchanges overnight. Sales at just 360kt were not going to put wind in anyone’s sail and left the market going into tonight’s WASDE report oversold.
With hints of reductions to Russian, Argentine and Australian wheat production and potentially Canada and the USA, we may see some upside action. If the trade consider the reductions not enough or the USDA manage to counter the reductions by reducing demand this US wheat market is likely to stagnate and continue on rangebound throughout their winter months.
China / US trade being tested. Earlier in the year China agreed to buy a volume of US soybeans and it was stated that the beans would be exempt from current tariffs. Well the first of those soybeans is presently being held on port until the 33% import tariff is paid. Dalian port has requested payment of the tariff in the form of a refundable deposit, only to be refunded once Beijing authorises a credit.
The short term impact is a growing reluctance from the buyer to execute their US soybean purchases. This may see imports to China swing back to S.American suppliers resulting in growing US stocks and yes, you guessed it, falling US values, well played China, well played.
There is still no official news on the China / Australia anti-dumping case for barley.