3/2/20 Prices

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India sows wheat during our spring and early December. This time of year there is a lot of speculation about the size of the Indian crop. Generally Indian wheat does not find its way in volume onto the international market but in times of poorer production or low quality India does look to imports to top up local supplies.
According to the Indian Ag Minister around 33.5 million hectares of wheat were sown this season, an increase of 12% year on year. This area could potentially produce around 109mt of wheat, a new record if seen. In theory a production of this size could give India an exportable surplus but with domestic support prices well above export parity values it is more likely we will see India increase their carry-over stocks.

Canadian durum exports remain 39% ahead of this time last year at 2.3mt. Cash prices for 1CWAD13 in SW Saskatchewan stabilised this week after slipping much of the previous week. At $C266 ex farm it would roughly equate to DR1 out of the Newcastle port needing to be priced at $415 – $430 to compete into the N.African or Italian market. Currently we see old crop durum at $475 delivered upcountry mill,  which is obviously well above export parity values.
US grain futures were generally lower bar corn which managed to close in the black. A lack of Chinese demand for US product is a major negative factor. Throw corona virus in the mix and the US trader isn’t sure where to look to find upside.

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