Miller Magazine Issue: 156 December 2022

85 ARTICLE MILLER / DECEMBER 2022 sively priced offers out of Argentina. Furthermore, Australia has recently experience some unwanted heavy rains ahead of the harvest, which might adversely affect the crop. Seri- ous weather issues persist in the United States as well. The ratings of the recently planted HRW in the US are currently at the record low levels and the relief for ongoing dryness is yet to come. On a different note, US wheat visibly struggles to capture any significant global demand due to logistical constraints and high prices for moving grain internally, which contribute to making it look expensive compared to other origin. Rumors of Lithuanian wheat sale to Iraq and of Polish wheat sale to the US, therefore, come as less of a shocker. The demand side is not looking very cheerful with the emerging cases of bird flu in the EU, which does not bode well for the feed offtake. Furthermore, the economic reces- sion in Europe, and the consumers reaction to it are not to be ignored. Having said that, the weather in Europe so far has been mild and the expected cold front with cooler tem- perature moving into the north-east (Germany, Poland and the Baltics) will put consumer resistance to the test. This colder outlook will also drop down into Ukraine and parts of South Russia, where snow cover is currently for the most part absent. Having said that, one of the most feared turnaround fac- tors in the grain markets today is the recent emerging Chi- nese demand with rumors of purchases of at least 4 cargoes of French wheat along with some barley. At the moment Russian wheat remains the cheapest available origin nearby, but other cash origins are not going down. Just over a week ago, for a couple of days EU wheat became the cheapest origin on the back of the quickly ap- preciating dollar explaining the logic behind the rumors of Polish wheat sale to the US, which in itself is a very unusu- al trade! From fundamental perspective, EU cannot afford this situation to last without further tightening of its already tight S&D, bearing in mind that the EU farmers have already committed nearly three quarters of their crops before the winter even started. Grain markets have eased significantly from the highs back in the early October, and prices until recently had a tendency to trend lower on the back of slower demand due to loom- ing economic recession undercutting consumer demand, lagging US exports and fears of bird flu in Europe. So much so, that the recent emergence of bullish factors, i.e. reviving of Chinese demand, concerns about unfavorable weather in the US and South America, increasingly tense situation in the Black Sea and worries about the new crop, may all point in the direction of an imminent reversal in the market sentiment and a good opportunity for short covering.