US wheat futures, and cash values out of the Pacific Northwest, continued to push higher overnight. Short covering in all grains was a feature as the funds continue to liquidate some of the massive sold positions they have built over the long term. Fundamental support came from a flurry of international purchases of wheat and talk that Ukraine will limit wheat exports in 2024-25. Asian markets took advantage of the low US values that are slowly evaporating now. US HRWW out of the PNW now roughly the same price or more expensive than Aussie H2 into the Asian market.
Support was also taken from dry conditions in Russia where winter wheat seeding is getting under way. US winter wheat sowing is about 2% through. A quick glance at WorldAgWeather.com shows there’s not a lot to be worried about in the US at present. On the other hand, much of the winter wheat region in Russia is showing just 20%-40% of normal rainfall for the 14 day period, the 30 day map doesn’t look a lot better. In the meantime the Russian / Kazakhstan spring wheat region continues to see rain, delaying harvest and reducing quality.
Turkey is expected to lift their “import ban” in October. There were reports out yesterday suggesting up to 1mt of Russian wheat had moved through Turkey during the ban period. Making it’s way generally to N.African and Middle East consumers. There was speculation that this would also occur for durum wheat but the quality may be the deciding factor in the end.
It should be noted that US wheat values appear to be leading the charge higher. Argentine, Aussie and Black Sea wheat values did not reflect the same level of enthusiasm as the US market. Local basis to Chicago SRWW here was smashed yesterday, from +31c/bu to +15c/bu, indicating the local trade have no interest in following a rally that, possibly in their eyes, is simply a managed money liquidation rally. This may leave marketing opportunities in OTC swaps if the basis with those products is better.
The Italian importers appear to be waiting as long as possible to acquire international stocks, maybe waiting for Russian, sorry, Turkish durum to be ready.