Technical trade and speculation that the US and China can come to some kind of resolutions at the G20 appear to be the main driving force behind last night’s rally in US futures. As we know anything without a fundamental back ground is on shaky ground these days.

Wet weather in November has seen around 40% of Argentina’s northern wheat crop fall into feed quality. This might sound like a lot but as a number it’s about 5% of production and something like 950kt that will find a feed home.

Russian wheat supplies are starting to slow. This has seen Black Sea offers increase by about US$2.00 / tonne week on week. High protein milling grades appear to be the tightest. As the Russian product increases in value the US product appears to be slipping in price and becoming more competitive. I’m not sure if the US can pull off the volume required to meet the USDA target but it does appear the opportunity to at least increase US export sales in being presented.

The Algerian tender completed this week for 600kt of optional origin milling wheat was priced lower than their last tender. Values were said to have ranged from US$250.50 to US$252.50 CnF. This is well under current Aussie values off the west coast and also suggest that US values may also be too high. This leaves France or Russia as the key suppliers, some suggest Argentina too.