December SRWW futures at Chicago closed just above the session low and down a little from the previous settlement price. Volume was back a little from the previous weeks daily average. The lower close continues to push the charts away from over bought and closer to a neutral position but we could still see another session or two of lower closes before we consider the chart neutral or even close to over-sold.

Good winter wheat sowing pace in both Russia and the USA put pressure on prices but the quality and establishment of both of these major exporters winter wheat crops is far from ideal heading into winter. There are some reports stating that the Russian crop is the worst it has looked for 40 years and there is a good chance the last 10-15% won’t make it into the ground.
In this week’s USDA crop progress report the new season winter wheat was rated at 41% G/E – 40% Fair – 19% Poor / V Poor. Not an ideal start. This time last year the new crop was rated at 56% G/E, so that is a fairly large difference.

Muddying the waters further we now see the Chinese port of Fuzhou enforcing a 14 day quarantine for ships that will arrive from COVID19 affected countries. This is not a concern for some as the quarantine starts at departure but for nearby suppliers it may increase the cost of doing business with China and may create further congestion. The major concern is that other ports will now adopt this measure thus slowing discharge into some of the larger ports. It takes a ship about 20 days to sail from Newcastle to Shenzhen.