US prices are up on the week (deferred positions) on talk of an improved export outlook. A further sale of two cargoes to Egypt and reports that the US may have secured some of the recent Algeria tender has lent support to the markets, although current shipping is still reported as being down 19% year-on-year against the perceived 14% yearly increase currently being projected by the USDA. Additional support has also surfaced due to late harvesting of US corn/soybean crops, thus delaying the final 5% of winter wheat planting being concluded, now threatened by current rain and snow and the forecast of much colder temperatures to covering much of the US.
EU prices are marginally lower on the week as the forecast is seen turning more favourable, with the likelihood of needed rainfall in the driest parts of the central EU. News that the Argentine shipping line-up has a 30,000t vessel due for Algeria, and the recent sale/talk of US wheat to Egypt and Algeria, does little to bolster French non-EU exports, although the expected slow-down in the pace of Russian exports is more a when, and not an if. How that then affects EU competitiveness is still to be determined.
UK prices are unchanged on the week, although the news continues to be driven by Brexit. The signing-off by the EU of the UK withdrawal document leaves just over two weeks of frantic lobbying before the Commons vote on the 11th December. Until then, currency will have its fluctuations, which will drive market prices more than current UK fundamentals. The seasonal slowdown seems to have commenced, with both selling and consumer buying very limited, leaving the market looking for external assistance to generate some activity.
In summary, market trend remains side-wards, although signs of support for US markets are slowly finding their way through into improved pricing levels. However, a major rally would be the last thing the US wants, as it needs to create export opportunities, and actual shipments.
Short-term, this weekend’s G20 summit and the US/China trade talks may provide some fireworks to the markets, but the long and short of it is, if they agree a deal the markets will rise, and if they don’t, the markets will fall! Back in the UK, it remains all about Brexit and the upcoming vote on the 11th December, the same day as the USDA releases its next set of US/global supply and demand projections – could be one heck of a day!