- Friday saw the USDA’s new crop balance sheets fail to spark fund buying of any significance.
- Assuming trend yields it is probably fair to say that US end stocks will remain at lofty levels and price outlooks are materially unchanged from 2016/17.
- Russian interior wheat prices are lower for the second consecutive week in both Rouble and US$ terms and it would seem safe to assume the latest price rally saw some farmer selling. Consequently we feel safe in suggesting that Russia fob price offers will struggle to hold rallies (above $190.00/mt basis spot) and other origins will likely also struggle to rally in any significant way.
- The wheat chart pattern has also broken down with next support at $4.30-$4.40 basis May ’17 futures.
- The USDA’s Outlook Forum has come and gone without much market impact, and anyway the balance sheet numbers are not too surprising. We view the recent correction in futures as more a function of rising S American crop estimates and the recent modest decline in interior Black Sea cash values. Our longer term outlook still includes a lack of major bullish input without a weather N Hemisphere weather problem.