The nearby moves on both Paris rapeseed and Minneapolis wheat futures were good examples of being on the wrong side of things as the nearby contract moves close to expiry. Nearby May Paris rapeseed had been much higher than the next slot, August, and failing to converge for some time. As liquidity shrunk in the May slot, so did the chance of closing open positions. Hence we see a move lower of –€62.75 / tonne in the May slot overnight, on the back of 847 contracts. Compared to a move lower of €6.75 in the August slot, on the back of 6,272 contracts changing hands in the session.
Minneapolis spring wheat was the opposite, up 15c / bu in the May slot, while every other US wheat contract closed lower. Volume in the MGEX May slot was 2147 contracts.
As mentioned above the trend in US wheat futures was lower. This lead the way for international cash values to fall. Reductions in cash values were noted across all major exporters including Argentina, the Black Sea, and Europe. The weaker AUD is going some way to counter these moves, but conversions differences compared to yesterday are generally a few dollars lower this morning. Locally we did see an improvement of 10c/bu in basis for track wheat over Chicago SRWW, but there continues to be a lot of pressure in international wheat values.
The US weather is good, Argie weather is good, Black Sea weather is a little questionable, as are parts of France, but generally the global outlook has few obstacles in the short term at least. The main pressure on US wheat futures came from the week on week improvement in the portion of their winter wheat rated good to excellent in Tuesdays weekly crop progress report. Add additional competition from Russian wheat, now coming back onto the market after a slowing in exports, and it’s hard to get positive on wheat in the short term.
International sorghum values were generally a little firmer, both US FOB values and CiF China values improved. US values out of the Gulf were roughly AUD$4.45 / tonne higher when compared to yesterdays conversion, this is taking the weaker AUD into account.