US wheat futures fell another 2-5 cents led by fund selling in HRW. The European market fell similarly, and this week has been marked by a Russian rush to find export demand. French exporters were awarded the bulk of the recent Algerian tender following the break in fob offers there. We mention that the US’s discount to other origins remains sizable. Russian fob prices are down $12/MT from early February, but Gulf HRW holds a discount to Russian worth $14/MT. The US market has had to drop to maintain this position, but a string of large export sales lies ahead.
Russian flour prices shrugged off weakness elsewhere and found new all-time highs in ruble terms. Russian flour & wheat tightness won’t be solved by lower prices. Market focus is shifting to a potential build in new crop surpluses if normal weather develops, but crop-critical weather is still months away. Updated climate forecast this AM include normal and well above normal temps during Mar-May across E Europe & the Black Sea.
Spot Chicago bounces around between $5.00-5.30 near term. Non US wheat exporter stocks are tight and Northern Hemisphere weather will have real importance in 2-3 weeks. Don’t sell breaks