Chicago wheat futures gain more than 0.7% today and rising from $645 per bushel to $652 after Russian Sovecon lowered expected Russian crop forecast to 80.7 million metric tons (mmt) from 82.1 mmt previously.
- After very bad May frosts, Sovecon sees deteriorating crop conditions and reduced yield potential following hot and dry weather. In March Russian (biggest wheat exporter in 2022), projected 94 million tons. What's more, Sovecon head, Sizov signalled that it remains uncertain if the current estimates fully reflect all the weather anomalies.
- According to Sizov hot and dry conditions in the winter wheat regions and very big rains in Siberia suggest that next actualization may be even lower than 80 mmt. which traders may see it as an open door to another trimming of current, very low forecasts signalling problematic wheat supply this year, despite quite good season and conditions in US.
- Russian Deputy Prime Minister, Patrushev said that country wheat export will fall this season to 60 million tons versus 70 million tons last year. Putin said on Tuesday (4 June) that '21 Russian regions had been affected by frosts that had destroyed more than 1% of the country’s crops'. Russia’s Grain Union see more than 1.5 million hectares of crops had been damaged.
- Slow planting progress in Siberia, the largest spring wheat producer, is raising Sovecon concerns (By 31 May, Siberia planted only 3.7 million hectares vs the average of 5.2 million ha). It may be even lower as above-normal precipitation are expected during the next 2 weeks, while the planting window is closing. Traders on CBOT may see Russian draught and communication as a balancing of improving US conditions, especially in Kansas.
WHEAT (H1)
Source: xStation5
