An up and down week which saw a fairly neutral WASDE report published on Thursday. An embryonic weather story around dryness in the HRW belt attracted some attention prompting some significant fund short covering.
SovEcon said Russia’s Dec wheat exports were 4.15 mmt almost equaling Nov’s record 4.21 mmt. They estimated Jan exports at 2.7 mmt. Russia’s export pace will have to slow considerably to keep 2017/18 exports below 38 mmt.
Sterling firmed mid-week on the back of BoE rhetoric suggesting an interest rate increase may be more likely and sooner than previously expected.
India’s wheat imports are set to surge this year as lower plantings and poor rainfall threaten output
South American weather has been a factor this week as concern over Argentinean dryness and Brazilian wetness supports the Soybean market. The Argentina Soybean crop continues to be revised down on ongoing dryness.
Some longer range forecasts today have dryness extending into the spring and summer for most of the US Southern Plains.
Europe largely benign
This week highlighted somewhat the role of funds in the market as a “technical” rally was kick started by plains dryness and South American weather.
The carnage in equities markets in general this week was also a factor as commodities generally were caught in the tail wind.
This week also highlighted the ample world supplies of grains. Expect weather focused, volatile trade as the trade looks to better clarify likely 2018 supply.