Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
Wheat finished last week on a firm note after the sharp losses seen last Monday in the wake of a series of disappointing USDA reports. Japan is in the market for 157,000 tonnes of wheat on its regular weekly tender. This continues the pace of stronger buying by Japan in January. Traders indicate that US soft wheat is losing ground in terms of its price competitiveness on international markets to start the week. This follows an improvement on that front early last week, but the longer term situation was highlighted on the latest Export Sales Report. It showed net cancellations in soft red wheat of nearly 100,000 tonnes. Harvest is mostly completed in the Southern Hemisphere and winter wheat growing areas in the US are expecting a return to near normal temperatures this week. This follows some of the coldest weather in the US in more than a decade last week. Some traders and analysts report that generally good snow cover may have prevented serious damage to the winter wheat crop last week with the possible exception of the some areas of the southern Midwest and central to south-central Plains. The Commitments of Traders Report for the week ending January 13th showed mixed trade by funds, leaning to the sell side. Index funds were net buyers of 1,333 contracts while trend-followers were net sellers of 4,879 to increase their net short position to 20,770 contracts. The latter activity reverses the trend of recent weeks toward short covering by the trend-following funds. Small traders were net sellers.
CASH NEWS AND TENDERS: Bangladesh is in the market for 100,000 tonnes of wheat. They had previously issued a tender on December 29th for 100,000 tonnes of optional origin wheat. Bids are to close on January 19th.a tender Syria is tendering for 200,000 tonnes of wheat after passing on that same amount earlier this week. Tunisia is said to be tendering for 100,000 tonnes of soft wheat and 42,000 tonnes of durum. Saudi Arabia is expected to tender for 200,000 to 300,000 tonnes of wheat in April-May. Jordan is tendering for 100,000 tonnes of wheat for April-May shipment. Pakistan issued a tender on December 29th for 250,000 tonnes of US white wheat. Deadline for bids is January 10th. They issued another tender for 150,000 optional origin wheat on January 12th. Deadline is on 1/31.
WEATHER: Temperatures are expected to be near-to-slightly-below normal in much of the Midwest and Great Plains to start the week, possibly lasting in most of the region through the weekend. Snowfall is expected to be minimal in most of the region.
TODAY’S GUIDANCE: Wheat has the most to lose from a stronger dollar and we saw a sharply higher dollar overnight. The higher dollar could bring further cancellations as there is still a good supply of soft wheat in Europe and some in the Black Sea as well, although poor quality is starting to be a problem there.
