US and Paris wheat futures closed in the green last night. The first higher close day to day that we’ve seen in nearby Chicago SRWW futures since this time last week.
Call it technical Tuesday, bottom feeding, turnaround Tuesday, call it what you will, but fundamental changes to world wheat S&Ds are not the major influence. There were no flash sale announcements for millions of tonnes of unexpected business, there were no nuclear bombs dropped on Russia, Ukraine, Israel or Iran. China hasn’t officially bought Argentina or Brazil, there is no fundamental reasons for the increase other than wheat is cheap, and the chance of it getting cheaper is becoming remote.
This alone may be a big enough incentive for the funds to liquidate their shorts in wheat, but even that is unlikely to change prices significantly in the mid term. Those major importers that are looking to buy wheat, like Egypt and their 3.8mt tender a week of so back that didn’t get set, may become more active at these levels, but it will be a trade off, bigger volume now at the bottom price wise, versus less volume later in the season sales wise, the S&D remaining relatively unchanged longer term. The trade may look to push futures higher, sell physical / buy futures, offering the funds an exit, before buying physical. There is a significant amount of grower resistance to selling physical at current values.

Both Paris rapeseed and Winnipeg canola futures closed higher, as were Chicago soybeans. This makes it three straight days of higher closes for both Winnipeg and Paris. Values now back to close to where they were during the first week of August.
The AUD continues to find support from the weaker US dollar. The US FED now appears to be heading down a path of lower rates. Unless local policy here follows a similar path we could continue to see AUD strength. How local policy could not follow a similar path is beyond me.