Wheat showed some independent strength overnight, supported by international production cuts. France’s Ag Min indicated its soft wheat crop would be 31.31 million tonnes (Mt) versus last year’s crop of 39.55Mt. Russian private analyst SovEcon took the sword to Russian yield estimates based on early harvest results which have been underwhelming. SovEcon was well above the street at 82.7Mt, and at 80.9Mt now, they are in line with other estimates, including USDA at 77Mt.  It seems the bullish and news is moving like the tide, and coinciding with production downgrades has been a laundry list of demand. Egypt’s GASC bought 230,000t of Russian wheat at US$0.40/t higher than the last tender. Jordan has also bought wheat, and Ethiopia, Syria and Pakistan are all looking.

Argentina is a developing story, with disappointing rains plaguing the wheat areas over the past two months. Some much-needed relief is on the horizon, which will be patchy and comes with some frosts, so it is not the crop-saver Argentina is looking for. Australia generally faces some solid competition from Argentina, as they harvest around the same time. Argentine has the scoreboard pressure of a corn and soybean export program kicking off around March, so it needs to aggressively clear wheat through the port. This generally places Argentina as the cheapest offer into Asia through that period. The USDA has them in for 21Mt of production, which is on the high side of private estimates.

Local forecast maps remain hopeful for a large part of the East Coast, especially for the winter cropping areas in Qld where crops are now more than happy to receive a drink of 10-15mm to ease the pressure. A large part of South Australia cropping areas continues to build and set up nicely with more precip on the forecast in the next 8-day as per the BOM. Aussie cash markets were softer, the bid side on the 20/21 crop pulling away by $2-3/t and ASX Jan 21 wheat down $2/t. The market feels like it is in limbo at the moment with thin demand, low grower selling opportunities, and it’s a matter of timing for the consumer, trader, and grower to come together.