There is a lot going on in the global agricultural futures market. Weather and political precariousness are creating an enormous amount of uncertainty for grain supply.
Over the weekend, the internal fighting amongst the Russian Government elite boiled over with an attempt to overthrow the Russian President. While the coup was unsuccessful, it creates an enormous amount of uncertainty regarding the flow of grains out of Russia, keeping in mind the Russian/Black Sea region represent around 25% of global wheat flows.
Grain merchants are trying to work out what happens next. Do grain exporters and farmers in Russia panic and sell more aggressively into the world market, to get cash while they can?
Do the farmers stop selling and hold onto their wheat stocks?
Will anyone take the risk to send ships to pick the wheat? Lots of questions remain.
In the meantime, the US corn crop is on a knifes edge. For the past six weeks, rainfall across the key growing regions has been well below average. The onset of the El Nino should allow the drought to break, but it needs to happen sooner rather than later.
Locally, prices continue to firm a little and are now trading equivalent to the mainland.