US wheat futures were close to unchanged by settlement after an early rally triggered profit taking and continued squaring up prior to Friday’s USDA report. The main fundamental driver for US futures is the ongoing dry weather around much of the world at present and the prospects that the US may well pick up additional business later in the marketing year as global ending stocks shrink.

Argentina has answered the call to produce more wheat with early production estimates coming in at between 19mt and 20mt. This is well above the previous record of 17mt. The crop in Argentina has only just been sown so there’s a long way to go yet. Conditions in Argentina are mixed with the last month seeing acceptable planting rains but not much more. There is subsoil moisture in most locations though.

European weather maps show little respite to the dry conditions in Germany and the western Baltic states. Russia and Ukraine is finally drying out with rainfall being minimal for last week and expected to remain that way for much of next week. There are some heavy falls expected to the far south of Russia around the Caucasus region. Keep an eye on winter wheat establishment issues.
Turkey announced it will release for sale around 2mt of the 3.6mt state owned wheat reserves. Officials were quick to note that wheat production is not the major issues with supply and demand both at around 20mt. The poor exchange rate seems to be the key.