Wheat lower again after the weekend
Monday, 22 December 2014
Last week wheat was the main focus of the Cereals markets and probably the most followed commodity. It started when Russia announced it would restrict its exports and the market reacted by buying wheat futures contracts like there was no wheat left in the world.
On Friday, the market sent another message: there is plenty of wheat in the world and the Russian measures cannot be a bullish factor for ever. Traders took their profit and the market seems to keep thinking the same today since the Chicago overnight market is currently trading lower in wheat (down 4'2 as we are writing). On that same day, funds were estimated to have sold 7,000 contracts in Chicago.
The Russian story should be over now, Russia has already exported most of its wheat and customers have bought what they needed. Other origins can supply world customers and the Egyptian tender this weekend is probably the best proof of it.
Egypt's main wheat buying agency GASC (General Authority For Supply Commodities) booked 300,000 tons of wheat, with a large part from France (240,000 tons) and the rest from Russia (60,000 tons). The Agriculture minister said their supply is sufficient until late April but traders expect Egypt to come back to the market before this date. Meanwhile, India allowed up to 500,000 MT of wheat exports at current prices.
Last week, weekly changes in wheat have been in the main markets: Chicago up 25 ¾ cents, Minneapolis up 27 ½ cents and Kansas City up 31 ¾ cents. This week should be quieter unless...
AgsPlayers