The US commodities market is clearly positive. Weather conditions in the southern US Plains and South America mean soy, corn and wheat are all in better shape.
Figures from the US Commodity Futures Trading Commission show that American stock market traders were the least negative in 8 months. Since mid-December, they have not taken so many net-long positions, in other words: betting that prices will rise. The share of net-short (betting on price cuts) for the corn contract has reached its lowest level since mid-June. For soy, the market is bullish again for the first time since mid-December.
The reason for the positive mood in the futures contracts of wheat, corn and soy is the different weather influences. Drought in Argentina in particular is keeping people busy when it comes to soy. This while Brazil is experiencing excessive rainfall. The drought in the southern US Plains continues to keep the wheat market busy.
Net long positions
Last week, traders held almost 47.000 net short positions for the soft red winter wheat contract, compared to more than 78.000 positions the week before. For hard red winter wheat, which is widely grown in the southern Plains, that was 13.500 net long contracts. That position is similar to last week, when the market turned to a bullish position.
A lot of snow (and ice) is expected in the northern part of the Midwest at the beginning of week 8. However, further south it remains dry. Argentina will be treated to rain this week, although it will fall locally and to a limited extent. The question is to what extent this can provide relief for soy crops. Brazil, meanwhile, is still struggling with a water surplus. The grain market continues to fluctuate with the vagaries of the weather.
More expensive Russian wheat
In Europe the market is in calm waters. The price of Russian wheat continues to rise and is currently around $200 per tonne for wheat with 12,5% protein (FOB). The reasons for the price increase are the weaker dollar, high demand and fewer shipments due to stormy weather.
Wheat exports from Russia in February are expected to amount to 2,3 million tons. A month earlier this was still 2,7 million tons. Analysts estimate that exports will pick up further in March, partly due to a larger supply.