The lack of any fresh news regarding the US/China trade talks, and no further purchases of US products, has left the market void of any positive news. Exports are still seen dragging last season’s pace and although sales are running slightly ahead, time and demand is gradually running out for the US to substantially increase both. Funds continue to build a short position, which again has pushed US wheat futures to post new contract lows this week. Reports that heavy snow cover and rainfall may delay US spring plantings did little to break the current downward sentiment of a market trying to find or buy demand.
European prices are lower on the week, but have held up well in the face of the US weakness and a firmer euro. Another decent EU shipment week, helped by further upward weekly revisions, and an average French vessel line-up is trying to lend support. However, with the assumption that EU stocks will increase further on lower exports and domestic use, and no current perceived new-crop weather issues, exportable surpluses in the EU, Russia and the Ukraine are also building ahead of harvest, when early season demand is expected to shift back into the Black Sea region.
The UK market is lower on the week, following the general global downward trend as the trade waits for the key Brexit vote next week. Fundamentals remain unchanged, with lacklustre farmer selling, although merchant short-covering continues to underpin spot premiums.
In summary, another week and another US contract low. No fresh positive news regarding the trade talks seems to have triggered the US into sell mode, despite growing concerns over US weather and spring planting prospects. The EU is all about demand for the remainder of the season. As for new crop, demand should revert back to the Black Sea. The UK will be driven by whatever is decided next week in Parliament. USDA reports are out later today, with little expected to excite the market.