Wheat futures in the US succumb to some technical profit taking after reaching five a month high earlier in the week, that’s a nicer way to explain the decline than to say prices took a reality check when everyone realised they were way above world parity values.
The punters will keep a close eye on the weather map in the US with a cold front due through next week. Parts of the northern plains may even see a frost. Not exactly what corn trying to recover in Iowa needs at this stage.
Interestingly the funds remained net buyers in most grains at Chicago and actually picked up quite a lot of wheat on the dip.
Chicago soybean futures, thus in some degree canola futures, continue to find support from the dry weather during pod fill across southern US, yield estimates across the central mid-west vary quite a bit.
The latest satellite data tends to support an Aussie wheat crop of just over 24mt. There’s been a lot of speculation on the size of the crop, both locally and internationally, with some punters talking closer to 30mt (dreamin) and others around 26mt. The dry end to winter and by the looks of it a dry start to spring, should see estimates begin to fall across the board now.
We should see the results of the Algerian tender for 50kt of feed barley today. Last week feed barley was offered at about US$205 out of France. On the back of an envelope this is pretty comparable to what we are seeing as new crop bids here now. So in theory at least we are at export parity, we just need to find someone to buy it now China has decided to take its bat and ball and go and sulk on the side lines.