Wheat Fundamental Support
Wheat finished lower yesterday following general commodity selling as outside markets and Ag. Commodities all traded lower. Concerns that Egyptian wheat demand could be smaller due to a lack of recent tenders could lead to more wheat in world stocks and with an already record large amount it continues to suggest the wheat market needs to move lower to find additional global demand.
With world markets currently shaken by the current situation in China and concerns over global stability demand for commodities as a whole continue to wane. Wheat export inspections numbers were good as we are moving more product. The major question right now is how if at all the USDA will adjust wheat demand on today’s report?
The USDA in past reports has suggested the United States will see an increase in wheat exports as other major sellers sold out of their stocks following a quick export pace to start the marketing year. Right now no major weather issues are seen with major wheat suppliers but the continued discussion that Russia’s Ag. Minister can make an announcement involving their current export situation has managed to keep the market on edge.
The US doesn’t seem to be poised to take advantage of these export channels as we are still priced well above European wheat and other major suppliers. We look for wheat to hold these levels as we are technically at a double bottom but a break of yesterday’s lows and further acceleration could suggest additional downside in a market that has already struggled at higher levels.
Wheat stocks estimates are 945 million bushels
World wheat stocks estimates are for 231.3 MMT