US wheat futures were sharply higher in overnight trade. All three grades putting on double digit gains with HRW leading the charge. Continued reductions to prime wheat across most northern hemisphere producers the key to the rally.
So far the lower supply side has been the key to higher prices, there has been no evidence of international demand rationing or panic buying. The SE Asian market see the Australian wheat crop in good shape and appear happy to wait and see what eventuates in come December. NSW wheat production estimates vary a lot at present. Currently the optimistic are there with 11mt+ for the NSW, the realistic are there between 9 – 10mt and the pessimistic are at less than 9mt. There are plenty of fields in NSW that have water logging issues and I can’t see a lot of urea being flown on to help recovery when it’s worth $800+ / tonne. I’m leaning towards the lower side.

The US corn crop is estimated at 91% flowering as of this morning’s USDA crop progress report. That’s a little ahead of last year, maybe the persistent heatwave the western corn belt is facing has something to do with that. Some locations in central south Nebraska are forecast to see temperatures to 36C (Columbus) or hotter Sat / Sun / Mon. The weekly G/E rating for US corn was back 2% to 62%.
Winter wheat was pegged at 91% harvested, bang on pre report estimates. US spring wheat harvested was estimated at 17%, double last year’s pace. Surprisingly the spring wheat G/E rating jumped 1%, now back at 10% G/E.
Russian wheat export tax remained unchanged week on week. Weekly wheat exports from Russia were 700kt.