US futures ended with modest daily and weekly gains, and overall world prices have failed to react to Thursday’s bearish corn data. Russian domestic wheat prices continue inch higher after finding bottoms in September, and despite marginal weakness in the ruble Russian replacement values are up $1-2/MT this week. The point is we doubt Russian fob prices, which are still driving world markets, hold much downside risk.
The CFTC’s commitment of traders report will be released Monday afternoon, but ARC estimates managed funds’ net short position as of today at 95,000 contracts, vs. 111,000 last Tuesday. There’s no need for any great liquidation of short positions, but nor is there any compelling reason for the market to collapse in the near/medium term. Argentina’s harvest is 8% complete and yields so far remain 25% below last year, according to the Buenos Aires Grain Exchange. The USDA was right to raise HRW exports on Thursday. Algeria bought a surprisingly large 210,000 MTs (likely from the EU) this AM. Target $4.90, basis July, to extend new crop hedges.
