- Today has seen Chicago wheat markets take the lead almost from the off with $0.12 gains throughout the afternoon (UK time) only to see that erode towards the end of the session. Concerns over the potential for extensive flooding when the extensive snows eventually thaw could well have been the early upside trigger. The prospect of that happening imminently does not seem likely given the continuation of cold conditions for another week, specifically west of the Mississippi River where soils are reported to remain frozen to deep levels.
- In stark contrast European weather is warming fast, raising soil temperatures and helping early season crop development as well as aiding the weather delayed spring planting programme.
- Russian grain production is projected at 90-92 million mt according to the latest AgMin forecast, although the Grain Union offers a wider spread at 90-95 million mt. The month on month decline in estimated output is attributed to reduced wheat output projections in the drought stricken key southern district. Regardless, the latest estimates are a big improvement on last year’s severely depleted harvest following significant drought damage. The weather conditions across both Russia and Ukraine look set fair, warm and dry, over the next couple of weeks assisting spring crop development.
- Egypt continues to create interest with their president, Mohammed Morsi, due to visit Moscow, presumably in an attempt to negotiate a route to further wheat supplies. Prior to the visit the Russian Grain Union have opposed any loans of government wheat stocks to Egypt who’s stock levels were today reported at 71 days of consumption (1.74 million mt). Given the view that production estimates are already optimistic, because of restricted availability of basic inputs, we could well be looking at “emergency measures” becoming necessary to resolve what is increasingly looking like a shortage of wheat within the nation.