Most international grain futures closed in the green last night. The Euro markets and US markets were higher apart from Winnipeg canola which stumbled a little, closing slightly lower on the nearby months. Both Paris milling wheat and US HRWW futures were higher, Paris putting on €3.25/t in the Dec 25 slot.

The main driver, according to the wires, is fundamental. Cold temperatures in both the US and Russia. The US freeze of a few weeks ago had plenty of potential to do some damage. There were a number of location that had little to no snow cover to protect young winter wheat. Looking at the current US snow cover map from the US Forest Service shows that there’s much more snow cover in the north this time around, with all but the southern half of S.Dakota (spring wheat area anyway) having ample snow cover.
The southern half of Kansas doesn’t have a lot of cover, and there’s nothing across Oklahoma and Texas. This might lead one to think this is where to look for some damage this time around. WorldAgWeather.com shows much of Kansas getting down to -18C over the next 24 hours. Oklahoma could slip down as low as -12C. Tomorrow could be colder still, Kansas potentially down into the -20C range or lower, northern Oklahoma not far behind. Conditions are expected to improve a little by the weekend. It will depends on what arrives first, the cold or the snow.
There’s a good chance this will keep US wheat futures firm, but the amount of influence this has over Aussie values in the short term could be minimal. This is evident by the decrease in APW / CBOT basis back into the negatives. Longer term we’ll just have to wait for the US spring to see just what has happened.
In Russia the Volga Valley is painting a similar picture to the US but probably not as cold as the US. Keep an eye on both these locations though as the combination of a severe cold winter and poor subsoil moisture doesn’t breed confidence in the winter wheat crop for both regions.
Last weeks Saudi purchase of wheat at US$276.37 CNF confirms Aussie wheat remains very competitive globally.