The continuing dry weather in Russia is resulting in reduced sowing of winter wheat. Wheat prices made further gains yesterday as the U.S. wheat increased in price to a seven-week high of 523 US cents per bushel, while European wheat rose to €177 per ton, notes Commerzbank.
The low soil moisture levels mean that plants that have already been sown are failing to grow. Crop shortfalls due to frost damage cannot therefore be ruled out, though this will only affect next year's crop.
This year's wheat crop is already done and dusted and proved to be very good, both in Russia and on a global level. Given the record-high stock levels, there can be no talk of any threat of supply tightening on the global wheat market, so the price rise is regarded as exaggerated, says Commerzbank.
