Volatile trading with mixed price movements.
US wheat inspections at 516,000t were down slightly from last week but about as expected. Two boats to Egypt, one of Soft Red Winter wheat and another of Hard Red Winter wehat, had been expected, with no extraordinary demand yet to be seen loading. Markets continue to chatter about the possibility that more demand is being booked, but with export sales reporting down, the inspections are the closest real confirmation we have, and are delayed versus the market. Beyond the fundamentally driven ideas of larger demand from Africa, the Americas and the Middle
Ukraine has joined Russia in the export restriction chatter, with reminders apparently heading out to the trade about the limited remaining exports, which compare with previously agreed unofficial limits. Domestic Russian wheat prices have also kicked up, which helps reduce Russian export competitiveness compared with more steady US markets. EU exports have been slow to date, with the record Black Sea flow, but are starting to pick up slightly on wheat as imported corn continues to work in feed rations versus wheat and barley.
Bean inspections were much more fundamentally supportive, with another week of more than 1Mt, a little less than half of that to China, but more sales will be needed to hit the USDA’s export estimates.
In South America, further cuts to the bean crop in Brazil are being made by analysts there as rainfall amounts come in below expectations. Argentine crops have not yet been cut, but worries continue, with the flood impacts still being determined.
There has been no rain to alleviate the dry across the Darling and Western Downs, and nothing appears on Bureau of Meteorology forecasts. However, more boats carrying grain are due to arrive from Western Australia to satisfy some of the short-term demand, even as the good part of the sorghum crop continues to be harvested.
Source: Lachstock Consulting