Chicago wheat closed below $7.00 yesterday.
The withering wheat [cute -ed] story is over, the question is: Will the Russians be able to plant next years crop?
The soil around the Black Sea is dessicated, it is going to take steady rains over the next four to six weeks to recharge the soil. And it can't come in the form of gully-washers or the fields will be impassable for machinery, people and even animals.
I disagree with the blanket statements in this story, the truth is nobody knows right now, but they touch on the main points.
Wheat Rally Won't Dry Up
Continuing drought in Russia and logistical problems with the U.S. crop should keep prices high.You can doublecheck our real-time commentary:
IF RUSSIA STAYS DRY through September, the record rally in wheat prices will see new shoots.
So far the focus has been on Russia's four-month export ban scheduled to start on Aug. 15. Russian President Vladimir Putin said his country, which had been expected to be a big player in export markets this year, wouldn't ship grains abroad in response to the record heat wave and drought that has blanketed many regions in Russia in wildfires and smoke.
More worrisome for grain-consuming countries, especially those that aren't self-sufficient, is that the small window to plant next year's harvest in Russia is fast approaching without any rains in sight. The ground is as hard as rock in some areas, which will make planting difficult. The lack of moisture across broad swathes of Russia's grain-growing regions is already seeding concerns about next year's crop.
While many traders assume some rain must come eventually, the market to date has underestimated the extent of the drought and the damage, and may be erring on the side of optimism this time around, too.
Given the uncertainty surrounding weather, there's talk that $7 a bushel is the new floor for wheat futures traded on the Chicago Board of Trade. Wheat recently spiked as high as $8.41 (Aug. 6). This is almost double the nine-month low the grain hit in early June.
"If Russia's out for two years, that changes the dynamics," says Daniel Basse, president of AgResource Co., a research firm....
...Jerry Gidel, an associate with North America Risk Management Services, says it could be a "logistical nightmare to get wheat, corn and soybeans out through our export channels....MORE
And many more.