The US dollar plunged today, and with wheat not subject to changing biofuel margins the market was allowed to stabilize following Monday’s collapse. There’s little fresh news available, though there’s talk Egypt may again lower its ergot tolerance to 0%, and as the ruble continues to weaken rallies will be limited to fund short covering affairs. ARC pegs managed funds’ net short this evening at 124,000 contracts.
Even other world markets appear stuck. EU & Black Sea fob offers continue to do very little on a weekly basis and are offered near parity with one another through winter (Russia still wins based on quality & freight). Gulf basis, however, has rallied and has pushed comparable HRW offers to levels well above the world market. Iraq interest is noted, but otherwise lasting rallies in futures will do more harm than good to US demand.
Abnormally warm temps will continue across the Black Sea region into the opening days of December, and so the seasonal slowdown in Russian shipments will be a bit delayed. Short covering rallies do lie in the offing but July 18 at $5.00 is a selling opportunity.
