US markets consolidate somewhat above recent lows this week, with fundamental news relatively thin.
- DEFRA reduce UK wheat crop estimate to 14.8mmt for 2017 (down from 15.163mmt prev.) This represents a 5% increase on 2016.
- Scottish Gov. reduce 2017 wheat production to 889tmt, down 41tmt on prev.
- German winter wheat area down 4.7% according to the German statistics authority.
- US funds estimated net short 250.3k corn, 163.9k wheat.
- India is reportedly considering raising the 20% import tax on wheat to further encourage an increase in the domestic wheat area.
- Sovecon increase Russian wheat exports estimate to 35.5mmt, up 500tmt on prev. Russia’s Deputy AgSec suggests that 40mmt would be achievable based on the current pace of exports.
- Parts of Argentina receive rains over the last week, though areas missed include Buenos Aires, Santa Fe and La Pampa. Foreword forecast appear to indicate hotter, drier conditions are set to continue for a number of areas.
- Freezing temperatures are affecting much of Mid North America, though there’s now snow cover in place in parts of Nebraska and Kansas. Little winterkill is thought likely at present.
- Argentina’s BA exchange report wheat harvest now 72.5% complete, up 14% on the week.
Quiet news week, with low volumes traded indicative of the holiday period.
Short term, the focus may be around the extent of any US fund short covering in advance of the New Year, given the large shorts in wheat/corn. Ample Global grain supplies continue to restrict upside.
12th Jan USDA report is the next major fundamental marker for the trade – expect range bound trade in the lead up, failing sharp weather developments/fund short covering.