Bulls looking to wrestle control back from the Bear

Grain,Silos,On,A,Farm,In,The,Central,West,Region

Wheat finished the week with a small jump having been sold off for most of the week on the back of uncompetitive US wheat export pricing. US exports for the week were borderline dismal barring some routine business. Wheat had been trading a fairly narrow range between 850-950 USc/bu, so a close below the key level of support in 850c/bu could have heralded another step lower to the next of support at 800c/bu. However, the recent downtrend is looking unlikely to continue if news coming out of the Black Sea is right.

The Grain Corridor is again in Russia’s sights, seemingly unhappy that Ukrainian grain is going where ever it likes, whereas Russian exports are still ‘hobbled’ by various sanctions.

This comes at a time when Russian grain exports are seen as increasing and actually surpassing pre-invasion export pace (Oct export pace up 13% year on year).  The sticking point is that Moscow sees the continuing impact of Western sanctions on logistics, payments, shipping and insurance prevents it from exporting fertilisers and chemicals –  which were a centre piece of the deal, brokered in July by Turkey and the UN.  A speech given by the Russian ambassador to the UN yesterday appeared to pour cold water on the deal unless the restrictions were removed.

US weather is in the spot light with drought conditions increasing across the agricultural belt. Mississippi River water levels are at record lows and impassable in places.  A forecast rain this week will help but more is needed to improve water flow, especially as winter is coming. US HRW wheat emergence is behind average as dry conditions hamper germination and establishment.  Forecast rain over the 1-7 day period will miss the majority of HRW areas.

Argentina is also in the grip of drought with the local grain exchange (BAGE) calling the 22/23 crop 15mmt, down from 23mmt last year.  A late frost has further dented production hopes with fears that actual results may be worse than anticipated.

The week ahead….

It will be interesting to see if wheat reaffirms an uptrend or if the recent weakness is a sign that prices are stagnating.  The dip in prices will help the US regain some competitiveness against global values.

Have any questions or comments?

We love to hear from you!
Print This Post

Click on graph to expand

Data sources: Reuters, SovEcon

Make decisions with confidence- ask about our board packs, bespoke forecasting and risk management services

Have any questions or comments?

We love to hear from you!
Grains & Oilseeds

USDA offers up a vanilla slice

Last night, the market rolled back on itself after the USDA printed a very vanilla April WASDE (World Ag Supply & Demand Estimates) report. With

Read More »
Grains & Oilseeds

USDA uncovers a big hole

Last week, I finished off the weekly market comment by saying “ Unless the USDA surprises with a sharper-than-expected reduction in corn area, I suspect

Read More »
Canola field
Grains & Oilseeds

Long term crop forecasts

It is hard enough forecasting commodity production for the coming season, let alone any further. Regardless, The Australian Bureau of Agricultural and Resource Economics and

Read More »

Want market insights delivered straight to your inbox?

Sign up to the mailing list to get regular updates to new analysis and market outlooks

Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published

Commodity conversations podcast cover image, a illustration of a sheep standing on a cow's back with grain either side
Listen to the podcast

Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.

Photo of a farmer surrounded by Merino sheep in dusty yards
Research: Analysis of the Australian sheep flock

In this report for LiveCorp and MLA, we analysed the historical trends in the demographics of the Australian sheep flock, examining domestic factors that influence farm-level enterprise decision making. 

Image of harvested grain pouring into a chaser bin
SERVICES AND CAPABILITIES STATEMENT BROCHURE

We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.