US wheat futures are now back above values prior to the bearish WASDE report that came out mid January. Not much of that has to do with wheat values though according to most reports, it has more to do with currency…. or does it.
On the 12th we saw wheat futures slip on the back of USDA data, on the 12th nearby futures closed at 420.5 USC/Bu, or US$154.50 / tonne on the day that equated to AUD$195.82/t.
Last night nearby futures at Chicago closed at US$162.03 / tonne and the AUD closed at 81.15c making wheat AUD$199.67 / tonne.
Over the last couple of weeks the AUD has moved from 78.9c to 81.15c on the back of US dollar weakness. If you take the value on the 12th, US$154.50 at 81.15c and you get AUD$190.04. Is the move higher in US physical wheat justified if it is representing anything more than a move in currency, if you were long futures you may need to ask yourself that.

Additional snowfall across much of the Russian and Ukrainian wheat districts have reduced any fear of winter kill giving the crop a better coverage of snow and protecting it from any sudden drop in temperature. So in theory the Black Sea crop is in all but ideal condition heading into spring. The winter wheat was rated at 90% good to excellent in Autumn and is likely to come out of the winter in much the same condition. The big question is will the firmer rouble increase or decrease Russian wheat values. Russian wheat has been the cheapest so in theory it can move higher. If it were to fall grower selling is likely to evaporate. Interesting times ahead.