The wheat market is going to take a little digesting today. The response in US futures was excellent, maybe a little over cooked but time will tell us if that is so, I guess.
Let’s have a look at the major influences that pushed wheat futures higher. I’ve covered the basic fundamentals recently, dryness in the US hard red winter wheat belt, planting delays in the US spring wheat belt, drought in Spain. That’s all fundamental stuff, that only impacts on production, that’s the side of the market that makes the actual grain, hardly relevant to the futures market now is it.
Let’s just assume that the attempted assassination of Putin, using drones, in central Moscow, at the Kremlin, at night,…. is real, and Putin was at the Kremlin, somewhere where a drone, with a limited amount of munition, in the dark, could actually fly.  Then that’d make an escalation in the war a little more likely, would it not. I assume they’ll blame Ukraine, no one in Russia would have any reason to assassinate Putin would they.
The drone attack makes the Grain Corridor deal look dead in the water now, a big enough catalyst to rally a wheat futures market at Chicago, that was grossly oversold and sitting at a 25-month low, to close up 5% overnight.
There were some reports in the US that the recent rain won’t have a big enough impact on the HRW to increase yields in Kansas. Fancy that, a wheat crop that’s rated 13% good to excellent and is 15% to 20% in head will not be able to capitalise on the 10mm to 30mm of rain it’s received over the last fortnight, I mean seriously, what kind of wheat can’t simply put on an extra tonne or two of grain with a shower at the end of a drought half way through heading, have a go guys.
Paris milling wheat futures were also higher, the Dec 24 slot closing at E238.75, an increase of E4.25 per tonne. Corn futures were a follower.