A lot of bullish factors and an upcoming USDA report made for an interesting week Good export sales, firmer Eastern European prices at the GASC tenders, concerns for yields over Aussie weather, and a really weaker USD provided bullish support last week.
GASC once again tendered last week and bought 475kt as follows: Oct 21/31 – 300kt Ru/Ro @$327.45-333. Nov 1/10 – 175kt Ru/Ro/Ukr @US$329.51- 336.33
These tender results brought interesting news to the markets, with the spread between Eastern European origins and others now narrowing (French wheat was only $5 above). Last week, estimates put Ukrainian crop exports @1.67Mmt, already 42% of their stated 4Mmt export potential. The time for origin substitution is certainly nearing, and even though Western European origins might want to wait for restrictions in the East to sell at a better profit, Southern Hemisphere crops are coming rather fast. There is also the fact that next campaign’s wheat trades at a $40 discount, so one does not want to be forced to carry wheat out. The higher prices on the GASC tender pushed the futures markets up. This, together with a globally improving 3rd country demand (eg Saudi Arabia buying 575kt for Dec/Feb), a weaker USD (right now @1.2781 against the €uro), a rapidly decreasing Eastern European supply, and concerning Aussie weather and Canadian crop, made for a good bullish support across all markets.
This week’s USDA report, on the 12th, will be much awaited in order to provide a direction. A lot is already in the markets as traders have formed their expectations, but it’ll be interesting to see what the USDA has to say.
www.AgriNews.ch – Sep 10, Geneva, Switzerland
