Today has been marked by a lack of news which has resulted in markets trading into negative territory throughout most of the day although things have recovered towards the close.

Consequently, we have focussed upon global wheat markets for commentary this evening. The Ukrainian export ban and lack of available Russian grains for export keeps the Black Sea region out of the market for the remainder of this season. Added to this, the pace of EU exports, mainly France, will result in an historically tight stock to use ratio at the end of the season and points very strongly to the need for the region to ration. An estimated three and a half weeks usage at the end of the season is far too tight for comfort, and the prospect of corn imports from the US and Brazil (now that the EU has approved GMO events last weekend) looms large and potentially very real.

The Australian and Argentine crop prospects remain under pressure as we have mentioned previously which adds to global trade tightness. It would appear that a cumulative 30 million mt has “disappeared” from global tradable stocks compared with last year as a consequence of heat, drought or flood depending upon location.

US FOB prices are slowly becoming more competitive, and we believe that the next time we see Egypt in the market, and they have been absent for the last 21 days, it is very possible that US grains will feature for the first time this season. After the US there are few origins left to fulfill the requirements of importing nations.

Little wonder then that we continue to be friendly to the wheat market for the remainder of this season and recommend cover be maintained at high levels through to new crop.