Looking at the charts we may have been a little lucky with a higher close at Chicago last night. The stochastic shows both wheat and corn futures quickly pushing back towards over-bought and soybean futures already well above over-bought. The key to the rally was support from a poorer than expected US crop condition report out after the close on Monday. Spring wheat was in a little worse condition than the punters expected. With wheat futures now back technically over-bought we may need to see continued deterioration in the US spring wheat crop or others around the world to sustain current US futures values.
The US forecast is calling for showers across much of N.Dakota and Saskatchewan on Friday. With a wide spread 25-30mm of rain predicted it will help but as we know all too well one fall of 20-30mm doesn’t break a drought. With temperatures across much of the US spring wheat belt 5C – 10C above normal for the next week 20-30mm may not go as far as the punters are expecting.

Ukraine is expected to see good rain across the major wheat growing regions. Russia too will see some good falls across the central winter wheat districts but the Volga Valley is missing out a little at present. Rainfall could be a double edged sword for some Black Sea crops though with harvest kicking off in some of the earlier fields already. Russian wheat production estimates were pushed a little higher by some private analyst last week, now estimated at 81.5mt. This is less than last year but still a very good sized crop. If the dry weather across the Russian spring wheat belt remains as dry as it is, the area of the spring wheat crop will be irrelevant, production estimates will reduce.