We have a USDA World Ag Supply & Demand report due out on the 12th, mid next week. Some analysts are explaining away this week’s volatility as positioning prior to the report release. Technically Dec22 SRWW at Chicago is overbought, but we could see another day or two of slightly higher closes before we see a technical correction, possibly about the time the USDA report is released. There was a gap to be filled in the chart around 908c, seeing this filled last night makes one wonder if the rally will struggle without some good fundamental support.
December wheat futures at Chicago were sharply higher last night. The higher close resulting in week-on-week gains of over AUD$23 per tonne. Volatility remains huge, the futures market no place for the faint-hearted punter.
Local wheat basis against Chicago SRWW had been improving (yes still very low at -58c/bu on Tuesday) before blowing out again on the back of Thursday and Fridays recovery in futures, now closer to -140c/bu than it is to the -58c it was on Tuesday.

Argentina remains very dry, the 30-day precipitation anomaly at just 20% or less than average rainfall for the entire wheat belt. Over the last 14 days some parts of northern Cordoba and Santa Fe saw some very light showers, but soil moisture remains very low and nothing in the forecast. Analyst are expecting to see a significant reduction in projected wheat production for Argentina in next week’s USDA report. Even though the data in the report will be up to 30 days old. The Buenos Aires Grain Exchange reduced their sown area estimate by 100kha on Thursday.
Canadian cash wheat prices were mixed, milling wheat significantly higher. 1CWRS13.5 spring milling wheat rallied over C$24 for a Dec lift closing the spread to 1CWAD13 durum wheat in SE Sask. Durum wheat values actually slipped C$5.57, the spread to milling wheat now just C$34.22.