This follows on the heels of last weekend's rains in China's drought areas, noted in last weekend's Bloomberg Analyst Survey: "Wheat Rallying 20% as Parched Fields Wilt From China to Kansas".
Although they are to some extent, substitutable, wheat is not corn. It is only because of the ethanol mandates that corn hit an all time record yesterday and is trading at a premium to wheat.
(both are down a few cents this morning)
Farmers and officials in Russia may have exaggerated drought losses of grains last year by up to 6m tonnes to cash in on compensation packages, implying the country may have more of the crops to export than had been thought.
Some growers who reported their crop has a wipeout to claim from disaster relief funds in fact achieved some harvest, even if only of 0.2-0.3 tonnes per hectare, US Department of Agriculture attaches in Moscow said."Analysts point out that reliable, unbiased data on grain production is still absent in Russia," the attaches said in a report.The under-reporting may have resulted in the actual harvest being some 3m-6m tonnes higher than the official estimate of 61m tonnes.Inventory estimatesIndeed, many observers consider this, and "not the crop forecast" for this year, was a major reasons why Russia decided relatively early in the growing season to let its ban on grain exports lapse as of July 1, the report added....MORE