There’s a USDA WASDE report due out mid next week, so there’s technical trade keeping US futures market somewhat de-linked from the fundamentals at present. US corn export sales were within expectation, and not bad at 1.14mt, but not enough to blow the froth off a Wall St cappuccino. The corn pit closed in the green but a 2c/bu rally isn’t exactly setting the world on fire.
Chicago wheat was down, both the SRWW and HRWW contracts shedding double digits in the Dec slot, not ideal, but probably needed if the US is going to start making some volume sales for the new crop. I’m just wondering how long MGEX spring wheat futures will trade at a discount to HRWW futures.
Cash FOB values out of the US Pacific Northwest followed the futures markets lower. The weaker AUD helps buffer the day to day conversion comparisons a little, but there is still a day to day decline of about AUD$5.73/t in PNW HRWW. Should note that club white wheat was lower, but only by AUD$1.19/t compared to yesterdays conversion.
French milling wheat also took a breather, the day to day conversion comparison back roughly AUD$3.84/t at the port. Paris milling wheat futures were back €2.75/t (AUD$4.50/t) in the Dec slot. Some punters are starting to predict a correction is coming for Paris milling wheat as speculative funds reach a record net long. I can’t help but think that in the past these records are generally set prior to a major correction in both grain and outside markets.
The only people enjoying the drought in Europe are the history buffs. German WW2 battleships are starting to emerge from the muddy floor of the Danube as river levels continue to fall.
Argie FOB Dec wheat values were unchanged in USD/t, the weaker AUD improved that conversion a dollar or so.
Algeria picked up 720kt of wheat in their last tender. The value was estimated at US$289-90 C&F, roughly US$25 higher than their last tender in June. On the back of an envelope this value converts back to something close to AUD$300 port NTL. French values work at this sale value, not Aussie though thankfully.