Taiwan picked up 106kt of US wheat out of the Pacific Northwest last week. With official US export shipments for the week ending January 29th at just 326.8kt any business will be considered good business. Mexico, Taiwan and Malaysia all feature on the US buyers list. US wheat continues to be very competitive into the Asian market. Funds continue to run a large, but reduced, net short in US wheat futures. The US commitment of trade report shows the managed money side of the Chicago SRWW contract net short 94,743 contracts, 12.88mt. For some perspective, year to date US export shipments sit at 16.69mt.

Trump reduced import tariffs for Indian products from 25% to 18% in exchange for India committing to purchase US$5b in US goods, mostly energy and ag, like soybeans and cotton. Indian will reduce import tariffs on industrial good from 13.5% to zero. India is also expected to introduce an E20 fuel later this year. Some speculate this will increase Indian import demand for ethanol, potentially from the USA. This speculation helped firm Chicago soybean futures (stronger soy oil), in turn adding strength to Canadian canola. Malaysian palm oil futures also bounced a little. Chicago soy oil gaped higher, up 2.36% by the close.

Conversion comparisons to Aussie wheat show the US at least AUD$10.00 / tonne under comparable Aussie wheat, without a trade margin or insurance being included. This is slowing Aussie exports and potentially indicating an increase in Aussie carry over, unless we see something change at the international level over the next couple of months.
Less Aussie wheat for export may mean more Aussie wheat on offer into the Aussie domestic market. Something the Australian feed grain market would be happy to see. Domestic positions in Australia maybe getting covered by the trade, but grower selling is very slow. Could this be signalling compounding trade shorts into the domestic market. It’s hard to believe the consumer would be happy to move in this environment with hand to mouth purchases.