US and EU wheat futures clawed back some of the big loss in the previous session. The move higher at Chicago were less than convincing though. Wheat there somewhat weighed down by the sharp decline in soybean futures. Corn was lucky to escape, CBOT corn futures mainly flat to a smidge higher.
Unfortunately the weaker soybean market at Chicago spilled over into the Paris rapeseed contract and the Winnipeg canola contract, both shedding significant value by the close.
The punters are now approaching the all time high futures volume record on corn shorts. For corn the speculative short volume has reached around 336,538 contracts, 42.06mt. There’s high probability that in real time, not the delayed reporting we see every week, that the funds have now surpassed the record level of speculation. Soybeans found weakness from excellent growing conditions in the US and acceptable export sales. Wheat well, it’s pretty safe to assume the bottom feeders were out sucking up cheap stock while the punters continue to build on their shorts. Further reductions in the French soft wheat crop were also supportive, officials there now suggesting a soft wheat crop some 15% below last year.
The arrival of stripe rust in some fields around Swift Current, the heart of Saskatchewan durum country, is of concern. The last few seasons have been mostly dry. Producers this year are now fighting against not only losing their flag leaf from rust, thus the ability to make good protein, but also against head scab if wet weather persist into flowering and grain fill. The durum markets were focused on the job at hand though, that is harvest in Italy. Values were again softer there, one exchange dropping the price by €10.00 per tonne. FOB values for French durum were lower but only by about AUD$1.08 when taking the daily moves in Euro / AUD into account. If the Italian price persists at this level it may weigh on French values longer term. Turkey is seeing lower yields and quality than last year as harvest there too progresses.
Black Sea milling wheat remains cheap, although Russian 11.5% FOB values are up AUD$1.00, it’s still cheap compared to other European offers to N.Africa.