Wheat commentary: Bearish WASDE puts futures under pressure

The market was in its traditional pre-WASDE holding pattern for much of Thursday, but a bearish release pushed futures down and undid a chunk of the past two sessions’ gains.

The USDA’s projected higher US ending stocks and lower exports weighing further on a market that fundamentally remains well-supplied around the world.

Of note though is the USDA now expects Indonesia to be the world’s biggest wheat buyer at Egypt’s expense.

Futures dropped in the aftermath of the release and by 1800 London the Chicago SRW March contract had lost 1% and May 1.2%, while Kansas City HRW was 1.2% lower for March and 1% lower for May.

While a lower oil price dragged the ruble down against the dollar, price indications heard in the market remained unchanged overnight with 12.5% protein wheat for March offered at $199/mt FOB Black Sea and May bid at $197/mt FOB.

The Agricensus Russian milling wheat assessment was increased 75 cents on the day to $196.50/mt FOB Novorossiysk, reflecting the movement of the spot window from February to March.

The APW assessment was unchanged at $236.50/mt FOB West Australia, with a weakening Australian dollar offsetting inland bids heard AUD 3 higher at AUD 280/mt.

In Argentina another 51,000 mt of wheat export licences were issued by Buenos Aires, while offer levels for new deals were unmoved at $187/mt FOB Up River for April and $192/mt for March.

With buying interest limited, the Argentina 12% protein assessment was unchanged overnight at $184/mt FOB Up River.

Elsewhere, the EU’s weekly export figures saw a meagre 157,772 mt of export licences issues for vessels sailing in the week to February 7 – one of the lowest figures of the marketing year if leaves exports 18% lower year-on-year at 12.6 million mt.

And US net export sales reported 393,400 mt sold for delivery in the current marketing year, up 36% from the previous week and 67% from the prior four-week average, in line with trade estimates.