Wheat has finally dropped to a level where the United States is competitive with the rest of the world. However, the Russian Ruble keeps dropping in value so Russian wheat continues to get cheaper. Russia is getting unwelcome rains during harvest which is lowering the quality of the wheat but they are still reporting better than expected yields. Wheat quality is low in Ukraine and many areas of the United States which is increasing the amount of feed wheat in the market and undercutting corn offers.
Wheat is oversold and is due for a corrective bounce. Spring wheat yield looking to be 5 to 15 bushel better than last year but disease potential is greater according to preliminary estimates from the Spring Wheat Crop Tour.
After an initial rally a couple weeks ago due to concern over acreage reduction and overall reductions in yield, the market has decided that beneficial weather is actually going to add bushel. Iowa and Illinois had exceptional weather in July which has estimates of their yield being in the 180s to 190s.
Trade is now discussing how much old crop corn will be moved this year before harvest starts as farmers continue to hold on to old crop corn. Buyers think that farmers will have to sell in order to make room for new crop but that may not be true. An increasing number of farmers are saying that they have the storage to store last year’s crop as well as the new crop. There is concern with stored inventory however. Stored inventory has taken on moisture this year through condensation and temperatures have been too warm to run aeration fans. Some producers may have to wait for new crop in order to mix with the old crop to improve the condition.