What Traders are Talking About:
* More bird flu in China. The number of known cases of the new H7N9 bird flu virus in China is up to seven after Xinhua news agency reported Tuesday four more people were stricken in the Jiangsu province. All seven cases have been in far eastern China in the provinces of Jiangsu, Shanghai (two deaths) and Anhui. The situation raises questions about whether there are ties to the recent death of at least 15,000 pigs that were found floating along the Huangpu River that runs through Shanghai. According to the People’s Daily online, none of the pigs tested had the H7N9 virus. This situation also raises questions about feed demand.
The long and short of it: The impact on feed demand will be minimal unless this turns into an epidemic, but it's still another negative markets must fight near-term.
* China may seek more U.S HRS wheat. China's state-owned ag trading firm, COFCO, has recently complained about the gluten content from Canadian spring wheat. The head of the Canadian International Grains Institute tells Reuters China may buy more U.S. spring wheat to fill needs if the problem isn't corrected. The story also says some European buyers have raised concerns about the gluten content in Canadian spring wheat shipments.
The long and short of it: Prospects for increased demand for U.S. spring wheat are a factor in Minneapolis wheat futures leading a corrective recovery in the wheat market yesterday and overnight. But some confirmed Chinese purchases of U.S. supplies are needed to turn this into a source of sustained strength.
* Indian wheat too pricey. India is actively trying to sell wheat onto the world market as the government tries to clear out excessive stocks ahead of what's expected to be a bumper crop. But those efforts are being slowed by prices which are higher than other global suppliers. The Indian government has set a price floor at which exporters can sell wheat onto the world market. Bloomberg News citing an international trade source says Indian wheat prices are 15% higher than U.S. wheat and nearly one-quarter greater than Black Sea origin supplies.
The long and short of it: Unless India lowers its price floor, the flow of Indian wheat onto the world market will remain more of a trickle than a flood. Still, active tenders by India to export wheat are psychologically negative for the wheat market.
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