World cash wheat values are generally a little lower this morning. Russian FOB values leading the way, their day to day conversion comparison into the Asian market is back roughly AUD$12.23 / tonne. This not only makes Russian wheat very competitive against US wheat, which up until recently had been the cheapest, but it also pushes the spread between Russian and Aussie wheat CiF Asian consumer out to about US$25.00.
This isn’t an unusually high spread considering we are comparing red wheat and white wheat, but it will put pressure on white wheat values as the spread over red wheat hasn’t been huge over the last few months. This is could result in the erosion of some of the half decent basis we’ve recently been seeing over US futures during the short to medium term.
Russian FOB values began to decline as their harvest picked up pace. Yields in Russia are expected to improve as the crop moves out of the drought affected areas in the south and into the better regions to the north. Russian, and potentially Kazakhstan, may have a card up their sleeve yet. The spring wheat regions to the east have seen an exceptional season. I wouldn’t be surprised if average yields there exceed trade expectations, time will tell.

Canola, both cash and futures, continued along the same volatile path it has set over the last few weeks. Both Paris and Winnipeg handed back some of the previous sessions gains. Canadian rainfall is expected to be useful across much of the major canola districts of Alberta but may miss a lot of the central or northern Saskatchewan canola blocks over the next 7 days. The Sask durum belt is expected to see some useful falls, possibly helping grain fill across a below average crop. In France the 7 days forecast calls for light showers across the north and east across much of Germany and Poland.
Storms have been a bit of an issue in Italy as durum harvest progresses north but nothing to the point we’ll see downgrading. Turkey remains exceptionally dry, irrigated durum in Turkey should be of a high grade this year but dryland fields were basically a write off in many locations.