Wheat futures still stuck

Wheat futures remain stuck in a tight range, with May trading between US420 to US435 cents a bushel.

Fortunately most in the industry believe it will be hard to see us move substantially lower in the short term given so many crops in the northern hemisphere are yet to prove but at the same time we have no catalyst promoting a rally either. 

On the geopolitical front the possibilities are endless.

The US is currently involved in many tussles which could have a large bearing on trade flows and currency.

However predicting what might happen is anyone’s guess.

For those still holding grain on farm there could be some good opportunities to get some sales away over the coming months.

As the majority become preoccupied with planting, there is every chance an end user realizes they are a bit short which could present some good selling opportunities for those that are able to execute.

There has been some fresh demand of late for malt barley, with Latrobe and commander parcels being sought after in southern NSW.

This has been driven largely by a lack of quality malt from competing nations, particularly Europe and Canada, with further requirements from maltsters still presenting themselves before switching to northern hemisphere new crop.

For those still holding old crop malt, this presents a good opportunity to let it go.

On the canola front, there has been little trading for some time as old crop remains all but sold and new crop targets are still $20-$30 away for most.

With increased production of oilseeds globally and a big swing to canola plantings in Australia, the oilseeds complex is becoming slightly bearish.

Soybean carryout looks to be getting bigger, crush margins are generally weak and margins are better for crushing soybeans than canola.

While potential changes to biofuel policies in US create an ambiguous outlook for the oilseed complex.  

With nothing in wheat’s favour of late, it seems only a matter of time before we see a catalyst.

Benign weather and comfortable stocks have the funds clinging to their record short position which has been making them plenty of money.

But throw in a weather catalyst and some geopolitics and the risks are leaning to the upside.