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London wheat was an impressive £3.85 up in the November 15 position, having gained 40p on Tuesday, but why?
European markets were provoked by firmer US wheat markets that closed over $5.
Commerzbank said the USDA 2015 – 16 wheat harvest figure of 731 mmt was optimistic and expected wheat to trade $5.20 in next few months.
The rise is largely due to weather with continued dryness in Russia and Ukraine with no rain forecast
However plantings in Russia similar progress as last year at this stage and they have had satisfactory 2015 despite continued growing /crop concerns during growing season
El Niño impact on Australian crops (dryness) continues to make headlines.
Fundamentally there are abundant supplies of wheat, world stocks of 226 mmt are up 7% on last year at record levels.
Markets have always been vulnerable to fund influence and with funds short combined with perceived weather threats could see significant buying.
Wheat has come down a long way and funds look at this with production concerns and feel investment opportunity as the upside is greater than downside.
Russia and Ukraine setting brisk export pace as Russia expects record exports in September; supplies swelled by old crop carryover.
Spanish exports in July up 5% year on year with significantly barley +75%.
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