- The US is gearing up for its annual Thanksgiving holiday break and trade has already exhibited signs of reduced volume.
- EU wheat saw quite some volume of export trade over the weekend with a number of destinations seen as active buyers including Iran, who following their nuclear deal may well become a larger feature in coming months with some suggesting their requirements as high as 8 million mt rather than the USDA’s projected 4.5 million mt. On the bearish tack, India’s latest export tender could well surprise to the upside in terms of tonnage. Iraq purchased 200,000 mt of wheat from Canada (150,000mt) and Australia (50,000 mt).
- The French corn harvest continues to struggle in wet weather and lends unwelcome upward price pressure to the nearby marketplace.
- The ongoing pressure on prices is clearly driven by strong nearby cash demand from users (crushers, exporters fulfilling commitments, China etc) who were faced with tight supplies as the last crop year closed. The duration of the pipeline fill has come as a surprise to many, including ourselves. We believe that Q1 2014 will see global supply pressures take the lead in terms of market direction and prices fall, as we have suggested previously. Rallies remain, in our view, selling opportunities.