US markets have managed minimal gains on the week as signs of fund short-covering entered the market with the long Thanksgiving weekend holiday ahead. Although old crop US demand remains lacklustre, some support is surfacing from lower US winter wheat crop ratings and, with moisture levels seen also lower y/y, a few concerns are being raised over new crop production, especially with another expected drop in US wheat plantings for the 2018 harvest.
EU prices are marginally weaker on the week, with little change to report re market dynamics. Tunisia’s recent purchase looks like Black Sea origin with the price well out against French execution. With the continued aggressive stance seen from the region, crop bureau FranceAgriMer recently lowered its projection for French non-EU soft wheat exports from 10.2mln t to 9.9mln t, increasing carry-out stocks by 0.1mln t to 3.3mln t in the process. Total EU soft wheat export as of last week were still down 23% y/y, reported at 7.5mln t.
UK futures are also slightly weaker on the week, although have bounced from the three-month low witnessed earlier in the week. The market still remains driven by merchant short demand. As the seasonal logistics kick-in’ growers able to load over this period may be able to take advantage of decent spot premiums against the deferred positions, where long-holders are more confident to offer supplies into the market, albeit at the market carry.
In summary, as the US tuck into their turkey, global markets continue to show little change in their grind-lower trend. Northern hemisphere weather, in general, remains non-threatening, although southern hemisphere production remains uncertain. EU markets and export prospects remain at the mercy of aggressive Black Sea shipping campaigns, and the UK, with a balanced demand/supply sheet is seen trading in a narrow range. Farmers who want to take risk off the table should look at increasing their percentage sold in the light of the current market.