AUSTRALIAN grain futures have lifted in the past week in spite of rain in key northern hemisphere grain producing nations allaying production fear risks.
ASX old crop wheat futures, in particular, rallied $8 a tonne to $373/t on Monday for May delivery while new crop, January 2021 delivery, gained a dollar to $311/t, while old crop port prices in Victoria, where much of the current selling is going on, were around $345/t.
Commonwealth Bank analyst Tobin Gorey said there was no obvious reason for the lift but said there could be some emerging concerns about the Western Australian crop, with most regions yet to receive an autumn break.
On the east coast, the industry is still factoring in a shortage of old-crop grain over the coming months and is keeping values high enough to prevent further exports.
Internationally, there some rain through parts of Russia and Ukraine, sufficient to ease potential concerns about drought temporarily but not enough to fully shore up prospects.
There has been a good start to the US corn plant, which is putting further strain on coarse grain values already in the doldrums due to the lack of demand from the biofuel sector, which is struggling to compete with the fossil fuel industry on price.
Donald Trump's constant sniping at China is also providing a headache for the world grain trade, concerned it may lead to instability in regards to the China / US trade deal.
However, key US crops such as corn and soybeans rose slightly in value overnight Tuesday with new sales to China still taking place.
In the medium term, the world will continue to watch the progress of crops in the major exporting nations in the Black Sea.
Russia is likely to fill its wheat export quota of 7 million tonnes with exports booked already.
Shipments will halt after the last cargo booked under the quota system leaves but it is not expected to have a major impact with a new marketing year beginning on July 1.
However should there be more issues with dryness the market may price in less stocks being available out of Russia, one of the world's largest wheat exporters.
On the flip side, Argentina is expected to have larger plantings while western European crops are also generally in good condition, falling away to the east through nations such as Hungary and the Czech Republic where it has been dry.