Following a fairly neutral November USDA report issued on Wednesday alongside the uncompetitiveness of US supplies and the ongoing Black sea shipments ensured that the US market for wheat was down about $14-15/tonne on the week. The fact that USDA made only minor changes to the US and global balance sheets in November in line with expectations failed to spark further buying interest. Meanwhile further north thousands of tonnes of wheat and oilseed rape are stranded on the Canadian prairies as heavy rains have hampered deliveries by road and rail to the ports.
Neutral November
Back to the Black Sea, Ukraine want the grain export deal expanded to include more ports and are hoping that that a decision to extend the agreement for at least a year will be taken very soon, hopefully next week. Also rumours have surfaced that the United Nations and NATO would agree to removing sanctions against one of Russia’s largest banks to boost Russain agricultural commodity and fertiliser exports. Russian wheat exports are now looking to be at 43.7m/tonnes for the 2022/23 marketing season due to the rapid pace of exports during October and strong demand from importers.
Tom Speight, trainee analyst at AHDB pointed out that: While the latest USDA estimates point to larger global output and larger ending stocks for 2022/23, this could change. In its latest forecasts the Rosario Grains Exchange cut Argentinian wheat production for the season to 11.8m/tonnes, which is considerably lower than the latest USDA estimate. If Argentinian wheat production was to come in nearer the lower estimate, then the global wheat supply picture would look different.
Back in the UK EU and UK prices have traded lower by €11.50/tonne and £3.25/tonne (May23) over the past week as a tighter monetary policy by the ECB and Bank of England is seen as potentially reducing demand.
