December Chicago wheat is trading 9 cents lower near 7:30 am CST. Kansas City and Minneapolis wheat are trading slightly weaker as well. The November Matif Milling wheat contract is trading 2.00 Euros lower. The wheat market was steady overnight but dipped lower near 4 am cst after Russia announced they had no plans to ban wheat exports. The lower trade was linked to profit taking after gains this week. Outside markets are seen as slightly supportive with the US Dollar trading sharply lower and stocks set to open higher on the day as investors await comments by Federal Reserve Chairman Ben Bernanke today.
Wheat was steady overnight as traders awaited news out meetings in Russia where officials discussed their grain production and domestic supply situation. The Deputy Prime Minister released comments that suggested that there were no plans to ban exports on grain shipments in the near future. Domestic supply requirements were said to be covered 100% and the Agriculture Minister now estimates their grain production between 70-75 million tonnes vs. prior estimates of 75 million tonnes. The results of the meeting were seen as a disappointment to some and wheat dropped on the news. Officials did leave the door open to some type of export controls going forward. US futures were also pressured as French Matif Milling Wheat futures dropped 1% following the results of the meeting. The focus of the market is likely to shift to the results of the recent export tenders by Saudi Arabia, Syria, and Jordan so the market can get a fresh look at world price spreads.
The weather in Australia has changed slightly and is now providing a better chance for rainfall in the west over the next week. Accumulation is not expected to be robust. This is the only weather event forecasted for western growing areas over the next 10-14 days. Furthermore, the forecast for eastern Australia looks dry for the foreseeable future. Wheat crops are beginning to enter into the important jointing and grain filling stages of growth. An increase in moisture and steady temperatures will be needed in the month of September to prevent further production downgrades. The USDA is estimating the Australian wheat crop at 26 million tonnes with private estimates near 23 million tonnes. If attained, this would be a 3 year. If the forecast remains dry, the market will likely cut production estimates even more, perhaps under 20 million tonnes.
Hurricane Isaac is dropping very beneficial rainfall into areas of the central, eastern, and southeastern wheat growing areas. Soil moisture levels should benefit greatly from this rain and will provide a solid start to planting next year's wheat crop. Dryness remains a concern in areas of Nebraska, Kansas, and Oklahoma. Soil moisture conditions have increased slightly for Oklahoma but the main benefit has been seen in the eastern half of the state, which are not the core producing areas. The panhandle and western half of Oklahoma remains very dry. The 3 day rain forecasts looks dry for nearly all of Kansas, Oklahoma, and Nebraska with remnants of Hurricane Isaac only reaching the eastern third of Kansas and Nebraska. This will be of no benefit to Hard Wheat growing areas.
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