...... was that Russia set the government wheat procurement for their reserve above the world price. That effectively keeps Russian wheat off the market.
They aren't stupid. Why put the price at a level that would hurt their farmers and match the paper game in Chicago? I think there's a very strong argument that Chicago has oversold and the today price for 'physical' isn't going to be the tomorrow's price. Not unusual at this time of year when traders think the world is 'awash' in wheat. I love hearing that term when the projections already call for consumption to be greater than production.
Meanwhile there are rumors India will turn into an importer again this year. They've had several fiascos in a row resulting in losses. First storms that flattened the crop before harvest and enough rain to lower quality. Then after it was bagged and waiting to be moved by the government into storage storms soaked a lot of that. As per normal in India the accusations of who's responsible are flying everywhere. Wheat is the most politicized crop on the globe.
Australia would like to supply India but the expected El Nino could conceivably cause extensive and severe dryness before harvest - speculative at this early date of course.
