Wheat futures in the US stole the show last night, jumping significantly higher. I’m grasping to find any real fundamental reason why. Most reports simply state technical buying. The rally does kind of take us back to a more mid-term average value but technically this Chicago wheat contract remains very overbought. Is this simply a nicely laid bear trap, time will tell.

Russia wheat production estimates are as reliable as ever, some say up, some say down. The western half of Russia saw some very good weather for wheat this year while the SW around Rostov saw some very poor weather. Will one region off set the other, that is the game they are trying to play. Average Russian yields have improved as the harvest moves north but are still around 13% less than last year on average. We need to remember that only about 20% of the wheat is actually in the bin, it’s early in the Russian harvest, so production estimates will continue to be nothing more than a guess for a few more weeks yet.

Meanwhile in S.America Argentina remains very dry across much of Western Cordoba and parts of Santa Fe. The Pampas region of Buenos Aires has seen some useful falls but the dry spell has resulted in production estimates from the Rosario exchange falling from about 21mt to about 18.5mt. The 7 day forecast is also dry for the central west of Argentina so keep an eye on this. Like Australia a wet spring can turn things around but for now Europe and Argentina do appear to be the key to prices in the mid-term.