The Buenos Aires Grain Exchange has reduced their estimate for Argentine wheat production yet again. The current estimate is now 15.4mt, back a further 5% on the previous estimate. The Argentine wheat crop has been reduced significantly from pre-sowing estimates due to drought and frosts. Combine this with the current problems the major wheat producing regions in Brazil are having with rain and floods and we start to see a much smaller milling wheat crop being harvested in S.America this year.
The October USDA WASDE report pegged Argie wheat production at 16.5mt and Brazilian wheat production at 9.8mt. Both estimates are now very unlikely with trade estimates from the region now between one and two million tonnes lower.

US wheat futures have pushed higher over the last two sessions. There’s some fundamental strength to the rally as suggested above and also from increased Chinese demand. There is also some geopolitical influence on prices as the situation in the Black Sea and the eastern Mediterranean continues. Russia was said to have dropped some bombs near civilian vessels in the Black Sea yesterday. Sparking concern that the shipping corridor that is currently being used is only a fragile excuse for safe passage.
Regardless of the disruptions to the Ukrainian export pace, we also see the Russian export pace slowing after getting off to a very robust start to the season. Any deviation lower to the final expected export tonnage from Russia is simply building world stocks, and should be viewed as such from a longer term perspective, shorter term bullishness should probably then be viewed as opportunistic.
Logistical delays for Brazilian soybeans was said to be helping US sales, once again pointing to a longer term stocks issue, but it did rally oil seeds.