Weekly US export sales of everything but wheat were at/above expectations, and through the week ending January 11th the US sold a meager 6 Mil Bu. This is double the previous week, but still well short of the pace needed to hit the USDA’s annual export target. Sales have failed to meet the pace required for three consecutive weeks!
EU prices have also declined in an effort to find better export demand and rid the market of excess stocks. Competition for world market share remains steep, and will remain so into the middle part of 2018. However, Russian fob offers have rallied to $194/Mt, vs. $192/MT a week ago, and so further downside risk in EU cash prices is limited. And as the world’s wheat benchmark price rises, and as minor feedgrain prices remain lofty, the US too will find better consumption on breaks. Longer term, the next major driver of price will hinge upon whether N Hemisphere exportable surpluses rise or fall? In the near term, it’s key the US dollar holds at 90 points; otherwise additional short covering is expected. Managed funds in Chicago on Tuesday were short 143,000 contracts of, a record for mid-January.
