The June WASDE is out tomorrow night. The sharp move lower in US HRWW and Spring Wheat futures was said in part to be some technical positioning leading into this report. There are also a few punters expecting to see increases in ending stocks and possible increases in world production. I’m not one of those punters.
Being the ever-optimistic analyst, I am I tend to think world wheat production currently has only one path to follow and that is lower. Look at the news of recent weeks, severe weather damage in China, dry weather in the Russian / Kazakhstan spring wheat region, declining crop ratings in France, Germany and Poland, poor quality in Italy, drought in Spain, the worst US HRWW crop in years, flooding in the Texas Panhandle, and dry weather persisting in both Argentina and much of eastern Australia. The only thing countering price movement higher due to lower production will be the fact that half the consumers of the world are simply running out of money……….. BUT…….. I could be wrong.

The weather forecast for the eastern corn belt in the US is looking a little better. This saw a little profit taking in the Chicago corn pit overnight. Dec23 corn futures were back 10.25c/bu (AUD$6.06). The seven-day outlook is predicting 20-60mm of rain across much of Illinois over the next week. This will be very welcome if it eventuates. Much of Illinois has seen less than half their normal rainfall over the last 3 weeks and the corn will need rain before the summer heat arrives or it will be in serious trouble.

We may see some more non-fundamental moves in US and Paris wheat futures as the punters position ahead of some 30-day old USDA data on Friday.