European prices are down $10/t on the week, following the global trend. The market continues to pull export trade away from Russia, although to date, this has not resulted in a significant rise in either EU or US exports. As expected, France took the majority share of this week’s Egyptian tender (180,000t) with Romania, the Ukraine and Russia each doing 60,000t. Whilst the French value was close to replacement, both the Romanian and Russian figures were well below. Traders suspect the sales were trade longs dumping tonnage ahead of a possible realignment of the current old crop/new crop inverse. Supporting this idea is the expected rebound in 2019 wheat production in the EU and Russia, following this season weather-related harvests.
UK prices are down £8/t on the week, with sterling firmer against both the euro and the US$. Market dynamics remain little changed, with the current spot-position supply squeeze lifting delivery premiums. Deferred positions remain relatively quiet on both sides.
The past week seemed to have all markets racing for the bottom as a new-crop two-year low was hit in Chicago. Both Paris and London closed at the yearly lows set in February and March 2018 respectively. While trade optimism over a potential US/China deal should lend support to soybean and corn markets, the wheat complex is slowly running out of time. Unless US sales show a significant upgrade in the next week or so, the markets could see selling pressure, especially if Russian exporters continue to gamble on the current market inverse.