Russian wheat analyst SovEcon lowered their 2024 wheat estimate by a massive 7.3mt to 85.7mt. Confirming that recent hot dry weather and late frosts have pruned yields enough to see the 2024 crop fall 1mt below the 5 year average. The central and southern regions saw the greatest reductions. I was expecting to see a greater loss in the Volga region given the dry weather there. Future reports may include further adjustments.
Black Sea wheat values, both Russian and Ukrainian continued to push lower, inline with weaker cash and futures markets across both the USA and for some grades in Europe. International prices generally fell away by AUD$5.00 to AUD$8.00 per tonne when taking the AUD into consideration.
Black Sea values, much like Australian values, did not reflect a lot of the recent upside in US futures. Cash markets there stood back and watched as the funds chipped away at their record shorts in US futures, thus they have not fallen as far on the back of this recent slip in US futures.
The weaker close in Chicago soybeans had the usual knock on impact to both ICE canola futures at Winnipeg, and Paris rapeseed futures. Values were more noticeably lower on the nearby, as May contracts rolled off the board, but new crop values at both exchanges were lower. The nearby change, when taking the AUD into account, amounts to roughly AUD$7.11 lower at Paris and AUD$11.13 lower at Winnipeg.
Conditions are starting to dry across the Canadian Prairies for those that saw decent rain over the last week. This should allow good progress for spring sown crops for those still working on sowing. Showers are expected to return to the prairies early to mid next week. Much of the major canola country in Canada could see falls of 15-50mm over the next 7 days.
The forecast for much of Europe is again showing heavy rain mid next week. Isolated parts of France and Germany potentially seeing as much as 75mm in places while falls generally could be as much as 20-40mm across most of Europe. This is probably not what farmers there wanted to see. The season has already been too wet. Heavy rain this close to maturity in winter wheat is not ideal.