Last night was a pretty boring session for most futures markets around the globe.
Was it positioning ahead of the WASDE report, a void of bullish news out of the Black Sea, no new demand news. They say the bulls need feeding everyday in the futures market. Some days it appears to be a mixed diet of cocaine, crack and caffeine, other days the diet consists of rose coloured glasses, a Mary Poppins CD and unicorn dust. I’m not saying that the futures markets have zero relationship to their underlying grain products anymore, it’s just not what it once was, say 20 – 30 years ago.

1CWAD13 durum prices ex farm SE Saskatchewan have cracked the C$500 market, a Dec lift averaged C$502.08 / tonne yesterday. On the back of an envelope, using Europe as an import point that converts to around AUD$600 ex farm equivalent for a good quality DR1 type wheat. Will we see that reflected in Aussie values, well over the last few years the spread got to within about AUD$50 to that direct conversion, so probably safe to assume not soon, or at least not until we actually see if there is DR1 out there to buy in December.
Speaking of traders on crack, news out overnight is that Turkey has sold a large parcel of durum to Italy. The details of the sale are blurry but if the top end guesses are right it could be up to 1mt. This sounds unrealistic from the outside as a sale of that volume actually has the potential to leave Turkey as a net importer of durum towards the later half of their consumption year. BUT, the big question is, will the massive pasta production industry in Turkey simply substitute durum wheat with milling wheat in their production for international pasta importers like N.Africa. This could reduce their demand for more expensive durum wheat, thus lowing pasta prices. Kazakhstan may also supply durum to Turkey if their quality holds on.