US wheat futures were hit hard in overnight trade. US wheat has been generally a little expensive over the last few months as price influenced rationing took place at their domestic level. This has seen export volume remain a little lower than where many would have liked to see it. This was reflected in yesterday’s USDA report showing net weekly sales at just 48.6kt. Granted this is a very slow time of year but this is still a very low number. We may now be seeing price adjustments to enhance their potential export volume between now and the arrival of new crop  in May / June / July. Conditions in the  US wheat belt do remain on a knife edge though, always better to rally off an artificial low than a fundamental high I guess.
A sharp decline in the value of the Aussie dollar against all major trading partners may help counter the fall in US wheat futures. With wheat basis also very close to season low under Chicago SRWW futures there is plenty of scope for basis to be improved here as well.
There’s been a lot of action in the ASX Jan22 futures contract for east coast wheat.  A closer look at trade volume and trade times yesterday shows the vast majority of ASX trade continues to be positions being rolled from the Jan 22 slot to the March 22 slot. Actual new business in the March slot may only represent some 20% of volume.
The AUD is said to find technical support at 71c, a break below this could trigger some serious selling though. Resistance is above 72.75 and many punters see this level as a very hard ceiling in the short term. Talk of increasing interest rates in March hurt the AUD and the stock market and produced a generally bearish sentiment on all things Aussie. Won’t even get to watch a decent tennis match to cheer us up.