Poor US and EU weekly export sales appear to have triggered a round of technical profit taking in US wheat futures overnight. The combination of slightly softer futures and the AUD back over 75c is expected to work against local wheat prices here today.
Looking at global trade wheat prices in general don’t appear to be suffering too much though. Take Monday’s Pakistan business for instance, around 90kt was offered at US$394.38 C&F, a higher number than previous business. This number also indicates that Australian milling wheat remains relatively cheap.
Chicago SRWW futures seem to be finding technical resistance every time they push above 750c/bu. Yes this is a very good price historically speaking. It would have been better to see it without the assistance of a US drought to get it there. Looking at the futures values in the US it is interesting to see that the values don’t taper off as we move into the 2022 harvest period. This tells me a couple of things. Firstly the market is flat, HRWW for instance is 777c Dec21, 780c March22 and 780c in May22. Not a lot of incentive to carry.
The second is that the market is flat. If this local price is so strong because of drought then why are we not seeing a steep decline in SRWW futures values from July onwards, it’s just flat right out to Dec22. Are they really that worried about supply right out to past the new crop.

I see reuters reporting that China sold 891,938 tonnes of wheat in the latest state auction, 88.5% of what was offered. That seems like a pretty good uptake for straight after harvest. The price was US$371, lower than the current gov cash bid. Wheat is cheaper than corn.