The US Fed continues to look like that 6 year old at the soccer field, you know the one, about 20m behind the crowd of 20 kids jostling for a little kick. We’ll call those kids the fund managers and bankers today, they are having a hell of game. Those with the wheat / gas pump logo on their shirts kicked 5 goals in ten minutes earlier, they may have peaked a little early in the game and are now eating oranges. That leaves the ball being kicked to-and-fro by the exchange student in blue and gold and the kids with the percentage sign and arrow logo, the bankers, are those kids even from this neighbourhood ?? Anyway, the Fed, he’s there now, he’s about to make a move, second one this game, I guess he bought the ball, it’s only fair, what a kick, shame it’s the wrong direction.

Chicago wheat followed the path of least resistance and closed the session lower. Week on week the December SRWW contract at Chicago slipped 112c/bu, about AUD$60. The Dec spread between SRWW and corn, now just 190.25c, just under AUD$103. Usually that’s closer to AUD$35, that helps wheat buy feed demand. Something we may need to see a little of in the US and Europe this year to help get the world stocks to use ratio below 30%.
The US did get some good wheat sales on last week though, so that’ll help, but so did Russia.
With US wheat futures falling $100 in a week, one would hope that sales picked up, as they did. During the same time frame European values were only down half the amount US futures were. Looking at world wheat stocks and demand, one can’t help but think that US wheat is fair value between 750c and 800c/bu. Let’s hope the improved export order volume doesn’t push the US price back up above demand value and continue to thwart their efforts to reduce world stocks. Keep an eye on Chinese weather over the next 7 – 10 days.