Markets largely lower on the week, as US weather dominates the focus.
US funds estimated net short 63.3k wheat, long 147.9k (corn) 143.5k (soybeans).
Strong US weekly corn export sales reported at 1.092mmt, with 240k new crop wheat sales and 67k old crop cancellations reported (further reemphasising the lack of US competitiveness).
China continues to auction off state reserves of corn, with another 5.6mmt sold this week. Now 11.8mmt in total for the last few weeks, with a further 7mmt due to be auctioned this coming week.
Tunisia buys 3 old crop, 2 new crop wheat cargoes this week. French/Black Sea origin. Iraq buys 100k wheat, Australian origin.
Strategie Grains place EU soft wheat crop at 141mmt for 2018 (141.7mmt this season). Old crop exports reduced to 20.3mmt from 21.2mmt (24.2mmt last year).
Sterling weakness supportive to London wheat last week, as attention returns to Brexit negotiations and a BOE rate hike in May is cast into doubt.
French old crop wheat cash premiums ease, despite ongoing rail strikes, as demand begins to slow.
US HRW crop forecast for some rain over the next 10 days. Dryness continues to be a significant issue, hence, rainfall levels will be monitored closely.
US winter wheat rated 31% g/e (up 1% on the week) - though poor/very poor increased by 2% to 37%.
Improved US Corn Belt forecast suggest good progress should be achieved this week. Estimated to be circa 5% planted to date (13% average for this time of year).
Safrinha corn area in Brazil remains dry, with forecasts indicating little rainfall
French winter wheat reported at 77% good/excellent Warm temps and limited moisture have been boosting spring progress for many parts of the EU.
FSU conditions remain good, with forecast unthreatening for the next few weeks.
Canadian Prairies and US Northern Plains remain snow covered following recent storms, delaying plantings. It’s not believed to be critically late at this stage however.
Weather continues to principally shape direction, as US HRW dryness and Corn Belt Planting delays occupy much of the trade focus. Improved weather outlook for both instigated the sell-off last week. Perception remains that if US HRW remains the only crop issue this season, markets will struggle to justify current levels.
That said, markets will trade the story and if Southern Plains dryness persists and Corn-Belt planting delays are exacerbated, then expect markets to remain underpinned.
In short, weather led volatility should be the theme of the next few weeks, with all eyes on US conditions in particular. Geo-politics/currency will continue to be monitored closely however.