US wheat futures traded both sides of unchanged, ultimately ending slightly higher on currency changes and as fund profit taking may have run its course. The US dollar hit a new 10-month low, the euro hit a multi-year high which works to keep cash prices there elevated. And as for world prices, updated fob offers are below, and it’s clear that the Aussie market is beginning digest much lower yield potential. Very little rain is projected in Australia into August 1st.
US weekly export sales totaled 25 Mil Bu, better than expected and the highest of the marketing year so far. White wheat continues to be sold in abundance, but even HRS sales aren’t too far behind last year. Recall the USDA has HRW exports falling 40 Mil Bu (9%). It’s very early, but pace analysis suggests the USDA’s forecast is a bit too low.
Our work on the major exporter balance sheet indicates current world prices are well within fair value, and whatever low is posted usually occurs by mid-August. A bearish outlook is not advised below $5.00, basis spot KC/CME.
