The US market is marginally higher on the week. Weakness emanating from last week’s stock report has been countered by short covering driven by weather concerns. The slow export pace does increase the likelihood of USDA raising US ending stocks next week, but declining soft red winter crop ratings and continued concerns over weather/spring sowing delays have encouraged funds to trim their exposure. However, reports from Canada suggest more spring wheat could be sown due to the dispute with China over canola shipments, providing some resistance to further market gains.
European prices have been mixed over the past week, with old crop higher and new crop lower. Firmer cash premiums, driven mainly by logistical issues and a further heavy shipping line-up in France, have supported old crop. The prospect of a rebound in 2019 EU soft wheat production and a rise in the euro to a four-week high against the US dollar contributed to weaker new crop markets.
UK prices have shown little change on the week, with both old and new crop values virtually unchanged. Market dynamics remain lacklustre as the whole trade seems to be waiting for a conclusion to Brexit. The ongoing debate triggered a small weekly gain in sterling as currency markets seemingly liked the prospects of an extension or a deal as the next move for the UK government.
In summary, global markets have edged higher, although the US/China trade talks still remain the major unknown. The weather has, and will increasingly have, a major say in short-term price direction. However, on the flip-side, demand and exports continue to drag and the prospect for a rebound in global wheat production in 2019 remains intact.