CME/KC wheat futures ended slightly lower, which ARC views as mostly a function of ongoing weakness in major exporting countries. Like corn, Dec CME has been stuck between its seasonal low and its 20-day moving average, and even the USDA’s November WASDE is likely to lack fresh input.
Major exporter currencies have become de-coupled from crude’s advance, and moved noticeably lower in Australia, Canada and Russia. Notice that, over time, crude’s relationship to currencies is quite strong, but weakness in Russia’s ruble in particular this week has been a disappointment to the bulls. Russian fob offers are pegged this evening at $192/MT, vs. $194/MT in late Oct, and amid ongoing warmth in Southern Russia a pace of record wheat exports will continue. Note also that abnormal warmth is forecast across the Black Sea through December.
Egypt’s GASC is seeking wheat for Dec arrival. Algeria has released an unexpected tender that closes on Thursday. Just how aggressive world exporters are will be measured by these tender results. Rallies will continue to struggle outside of periodic short covering.
