US and European wheat futures ended unchanged. Both markets have found support at/near recent lows, and fresh news today is mixed.
Egypt secured a hefty 240,000 MTs of Russian wheat at $195/MT, basis fob, down another $1.50/MT from its purchase last week – despite renewed uncertainty over Egypt’s ergot tolerance – and clearly it’s still a buyers market. Russian quotes today are a bit weaker; EU cash markets are unchanged.
US weekly export sales totaled a decent, but not great, 18 Mil Bu. This is down 10 Mil on the previous but slightly above what’s needed to hit the USDA’s target. Traditional importers have stepped up coverage following the recent break, and ARC looks for steady US export demand into late year.
Argentina’s harvest is 12.5% complete, but yields remain disappointing. As of this week, wheat yield there is averaging 1.5 MT/Hectare, vs. 1.8 on this week a year ago. The Beunos Aires Grain Exchange maintains its production figure of 17 MMTs, but this could be 2 MMTs too high if yields don’t improve in the next 15-30 days. Along with potential flooding in Australia next week, S Hemisphere production is a concern.
We advise against chasing breaks, and seasonally price trends are broadly supportive into late year.
