US wheat futures fell 1-5 cents, led by KC, amid a strength in the US dollar and thus weakness in other exporter currencies, and as Russian exports continue to surprise. A relatively cooler pattern lies in the offing for the Black Sea, but it’s unlikely that ports will be significantly affected. ARC’s contacts speculate that Russian wheat shipments may hit 36 MMTs, vs. the 33.5 MMT forecast.
Other world cash markets have inched higher in recent weeks, but the quick boost in US futures did hurt the US Gulf’s position in the world market, made clear by the graphic. Along with last week’s paltry sales number, fund short covering has taken a pause.
Egypt’s GASC is seeking supply for mid-Feb arrival, and again its expected that Russia wins a majority of the tender.
We caution against turning too bearish wheat with support noted under $4.15 March Chicago. The market still must reconcile near record short positions in Chicago & KC with declining US supplies and the abundance of old crop wheat that prevails. We see wheat in a range.
