Another round of sub-freezing temps were recorded across much of New South Wales over the weekend, but US wheat futures instead failed at tech resistance, and also extracted some premium amid a rather wet pattern forecast next week across the HRW Belt. Winter wheat planting through Sunday reached 13% complete, vs. 15% a year ago. The EU model’s 6-10 day precip outlook is at left.
Egypt’s GASC is seeking optional origin supply for late Oct shipment, which again should be filled by Ukrainian/Russian origin. The Black Sea will dominate world wheat trade into late autumn. However, as that market finds demand, prices continue to rise. Russian wheat for spot arrival is offered at $188/MT, vs. $180 just weeks ago, and Russia’s discount to other origins is narrowing. ARC detailed this year’s loss of S Hemisphere wheat, and as such the US market will be well positioned to capture world demand beginning in winter.
Other than periodic short covering, rallies will be tough over the next 6-8 weeks, but we maintain seasonal lows were scored in late August. A recovery to $4.75+, spot CME, is targeted to catch up on sales by November/December.