By Joe Dales, Farms.com
News out of Russia helped turn the momentum in the markets and saw wheat futures strengthen in global markets after the sharp grain futures sell off earlier this week, triggered by forecasts of rain and the continuing debt troubles in Spain and the rest of the European Union.
"Perhaps launching the baby, bath and the entire kitchen sink out the window yesterday was not such a good idea," grain traders at a major European commodities house said.
The bottom line is that we are going to see cooler temperatures in most of the Corn Belt and the Plains in the next few days, and we will see cooler temperatures in the next two weeks in the Corn Belt than we have seen in the last two weeks. But it should also be noted that there is no significant indication of increased rainfall. Rain is what farmers were hoping for to help save the parched crops, especially soybeans which still have a chance to produce some good yields.
Russian grain export curbs?
Fears concerning wheat supply grew, as talk mounted that Russia is poised to introduce some kind of restriction on grain exports, amid further gloomy talk about its harvest.
"With the Russians' recent history of imposing an export embargo last time they suffered a crop problem the market is especially aware of any Russian crop scare."
Moe Agostino, Risk Management specialist said "rumours in Russia are that due to drought and poor crop yields we may see an embargo or export tax.”
There were some negatives for wheat too, in terms of the lack of competitiveness of US supplies even in a market whose generally elevated prices prompted Jordan to ditch all offers in a tender for 100,000 tonnes of wheat.
"US wheat is still overpriced. The analysts will be watching export numbers closely,” says Agostino.
Still, Morocco cancelled out some concerns by issuing a tender for 300,000 tonnes of US wheat, while Libya bought 50,000 tonnes optional origin. After the close, Iraq was revealed the buyer of 150,000 tonnes of Russian wheat, perhaps getting its order in before taxation or embargo strikes?