Technical buying continues to assist US wheat futures higher. The punters are trying to underpin this rally with thoughts of increasing US exports as Black Sea volume declines over the next couple of months. Without the USDA reports coming out of the States to back up this assumption the rally in wheat futures is nothing but pure speculation creating an opportunity to clear short positions in an otherwise dead market void of bullish or bearish news. I guess the major question for the US wheat exporter is who will be the major buyer of all this new wheat business. I’m sure Russia is not about to walk away from the Middle East. It’s an easy sell given their proximity. The expectation is that Asian markets will be the key. Australia has a few of its own issues to worry about and is likely to reduce its annual wheat exports by 6-8mt back to around 10mt.
If US exports are to pick up that shortfall you might have expected to see export data reflecting it well before now.
Some punters are suggesting that trade negotiations taking place on the 8th between the US and China are the key. China have some large piles of their own wheat to chew through. To see China on the US order book for wheat might be a bit of a long shot but the trade are peddling a 1.5mt number around at present. This number has no fundamentals holding it up though, it is simply the average China has imported over the last 5 years.
In other news the USDA has announced it will not publish the WASDE, stocks reports, or grain production reports next week. As the US government shut down moves through day 14 there is a growing number of unimpressed workers and industry participants.