Australian wheat exports are at about the half way level according to recent reports. Around 3mt of an expected 7mt – 8mt has left the country with the main buyer being the Philippines. News that China bought 40% of a recent 1mt purchase from Australia is also interesting as this sale and the current February stem bookings equate to about 1mt.
After losing a recent WTO battle with the US China is expected to import around 9.6mt of wheat annually. It is expected that most of this will be high quality wheat for blending with their domestic product.
Local S&D reports suggest if the predicted 8mt of wheat does leave the country for international buyers than Australia could be left with carry-over stocks after planting at close to 1.2mt prior to harvest in 2020, a very, very low number.
In the USA wheat futures lead the grain markets lower. Technical selling and disappointment after missing any of the latest Chinese purchase were key factors. Poor weekly export inspection numbers earlier in the week didn’t help. If weekly export sales numbers, due out tonight, are also poor expect to see continued selling. The charts are showing that wheat is approaching a neutral point at the CME so we may see support creep in if export sales are towards the top end of expectations (trade range guess 300kt – 750kt).
Weakness in grains continues to be contributed to the coronavirus outbreak as well.
Strikes in France have tied up 450kt of wheat at the ports. It’s been suggested the trade are buying futures to cover losses, not sure how that’s working out, Paris milling wheat back E2.00 overnight.