US futures were lower overnight led by a crashing corn market. The US is in a whole heap of trouble at present when it comes to corn. No one is driving anywhere so ethanol demand is non-existent. There are staffing issues at chook houses and feed lots, in some cases this is leading to the need to cull livestock to prevent a disaster.
Wheat was simply led lower with spill over selling triggering more technical selling. Wheat conditions around the world are generally favourable but the US trade continue to overlook the potential winter kill damage in Kansas over the last few days. The lower the market goes the further it can rally I guess. The punters work on the differentials not the end product value after all.
Technically we should see wheat start to find support at these levels. The charts are showing wheat in the July slot is approaching over sold and at these values should be considered cheap into Asian markets although US wheat is still around US$15 dearer than Black Sea wheat into Egypt thanks to a healthy freight penalty.
Talk of export bans on wheat from Russia and Ukraine is keeping the Middle Eastern buyer on edge. Romania pulled the pin on non-EU wheat exports last week, the first to do so. Romanian Prime Minister Ludovic Orban stated that he refused to be left without wheat because of the greed of some grain owners. Although the move sounds impressive, like Russia and Ukraine, Romania is also at the end of their marketing year with minimal sales left to complete. Being one of Egypt’s major suppliers does present a problem for Egypt though when it comes to creating competition when they tender. Hence another tender announcement overnight.