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WASHINGTON, Nov 03 (AP): Wheat markets were slightly higher for the week, spending a lot of time testing harvest lows before finally catching a bid.
After last week's late rally on news that the US captured some of the Egyptian business, there wasn't much follow-through to the upside this week.
Russia wasn't having any of the US taking its business, so it quickly lowered FOB offers to bump us out of the competition.
Russia's government also raised wheat production estimate on an increase in spring wheat yields; they raised export estimates as well to between 30-33 MMT, much higher than the 25 MMT the trade had dialed in.
US futures slid, testing harvest lows yet another time until a sharp rally in soybeans pulled corn and wheat higher.
A tweet from the President raised hopes that the US/Chinese trade war would find some resolution shot the soybean and stock market higher on Thursday, lifting most of the Ag markets in the process. We'll see how far that tweet/rumor takes us. I'm not holding my breath.
Export sales perked up last week. At 583 TMT, it was a significant increase from the last several weeks.
Higher quality wheats of hard red winter and spring wheat continue to be the largest sellers.
This could be the beginning of the increase in US sales that has been expected for the last few weeks.
The expected increase in US exports hinge on a few factors, the first being the expected slowdown in Russian sales. On a FOB basis, the US is actually lower priced than Russia, but transportation costs are still the limiting factor for us in the key Egyptian market. But other buyers are already shifting purchases to the US, especially for milling grade wheat.
It is worth noting that this week the Russian government proceeded in their threat to shut down elevators that were delivering low quality wheat, with 5 on the chopping block this week.
Clearly, even if Russia can keep up the volume of sales, delivering milling quality wheat will be more challenging for the remainder of this marketing year.