US wheat futures were mixed with US corn and soybean futures falling further while all three US wheat grades pushed higher. Corn and beans continue to be heavily influenced by oil values. CLM20 Oil slipped US$4.60 in the June slot to US$20.43. The Dow got caught up in the failing oil market and shed 566 points in the session.
The big winner was the wheat contract, we’ll concentrate on that. The rally was a combination of technical buying on the back of a generally oversold wheat futures market and the increasing likelihood that Black Sea states will introduce an export ban sometime between now and new crop to sure up domestic supplies and head off domestic food inflation. The chance of this happening is also being enhanced by falling production expectation for the new crop. The latest IKAR prediction saw month on month estimates reduced by 3% to 77.2mt.
A quick look at World Ag Weather shows minimal rain was recorded across Russia’s black soil plains over the last week. The week ahead looks a little more promising with some falls of 15-30mm across much of the Volga Valley but large swathes of Russia and Ukraine are predicted to see nothing but trace falls of less than 10mm.
Further west in France rainfall has been patchy across the SW but they should see falls increase across the entire south over the balance of this week. Across the central and northern wheat districts of France, where over 50% of the wheat is grown, rainfall has been minimal and is likely to remain less than ideal for the week ahead. Germany and Poland are also dry and expected to remain that way for the short term. Temperatures across France are also expected to be 2-4C warmer than average for the week ahead.