There are two numbers the USDA produce on a weekly basis that have a big impact on futures values. These are the export inspections number, the amount of grain actually being loaded and the export sales volume. Sales can get cancelled so a good sales week at some stage may just become an average sales week if the ships are not loaded. This means the export inspections number is important as it confirms what is actually leaving the port.
It’s last night’s export inspections number that created the upward momentum in US futures overnight. With the wheat number at 682,162 tonnes it’s confirming the uptick in US sales is rolling through to confirmed export business. The most interesting part of the data to us is the fact the Pacific North West is loading more than the Gulf, indicating good volume is moving into Asia.
This is a step in the right direction for the US as weekly export inspections and sales need to be around this volume to reach the current USDA estimates.
The US needs to surpass the Russian weekly export pace, which is about 545kt per week, to meet their projections. This is a big call for the USA to rise to. It’s not unusual for Russian exports to fall as winter slows logistics so the big months for the USA may be yet to come.
A rally in US futures may present Australian producers with marketing opportunities for the 2019 wheat crop but more importantly this summer’s sorghum crop.