Donald Trump, the US president, termed the bill imposing sweeping
new sanctions on Russia as "seriously flawed" and "unconstitutional".
US wheat farmers
may also think of the legislation as bad news, given the pressure it has ended
up putting on wheat prices, via its impact on the rouble.
The rouble had been appreciating nicely until the spring, strengthening
to a little under 56 roubles per $1, before it was undermined by a retreat oil
prices of oil – a key export for Russia.
The threat, and then enactment, of fresh US sanctions has
only exacerbated the currency's retreat.
It is down 2% already this week, to 60.7 roubles per $1. (This
at a time when the dollar has been under pressure too.)
That makes Russian exports more competitive at a time when
it is harvesting a huge wheat crop, pegged by some observers at as much as a
record 77m tonnes – of which it will likely need only a little over half for
its own consumption.
'Outside looking in'
Agritel said: "Russian production has been revised up, now
seen between 74m-77m tonnes," as estimated by Moscow-based Ikar, "and is offsetting for now the dry conditions in
the US, Canada and Australia" in terms of its impact on wheat prices.
Indeed, Russia's dynamics have lowered the floor on international
wheat prices, including US ones which had, as Benson Quinn Commodities said,
seen a "rather drastic narrowing" of their premium over many rival origins,
given the break in futures prices and a softer dollar.
"Expect the US to be on the outside looking in on the higher
profile tenders," said Minneapolis-bsed Benson Quinn Commodities, but added
that the easing in prices was "a step in the right direction.
"At least it is a chance to do business in our own
'Save some test
More on the US wheat export performance will be known later,
with data expected to show US export sales of the grain last week at
300,000-500,000 tonnes, at best matching the total of the previous week.
But as of 09:15 UK time, (03:15 Chicago time), Chicago soft
red winter wheat for September stood down 0.8% at $4.57 ¼ a bushel, consolidating
its position back below its 100-day and 200-day moving averages.
Minneapolis spring wheat, the wheat complex leader for now
thanks to drought in the northern Plains, was lower too, down 0.5% at $7.18 ½ a
bushel for September, also feeling pressure from some rain relief over the past
couple of days.
"Rain was noted in the northern Plains and Canadian
Prairies. Totals of 0.5 inches or better are noted in a number of areas,"
Benson Quinn Commodities said.
"Regarding the US and spring wheat production, these rains
may help save some test weight on the latest portion of the crop to develop.
"Otherwise, the rain was more important for the soybean crop."
Indeed, soybean futures eased back too, down 1.1% at $9.66 ½
a bushel for November delivery, as improved Midwest weather for what is the key
month for the oilseed, bringing podsetting, underpinned yield expectations.
"Overall crop conditions over the next two weeks should
improve" thanks to "beneficial rain", said Terry Reilly at Futures
Still, prices later may also depend on US export data,
expected at 100,000-300,000 tonnes for 2016-17 (which ends this month) and 250,000-450,000
tonnes for next season.
For corn, US export
sales are also expected at 100,000-300,000 tonnes for 2016-17, with next season's
figure seen at 400,000-600,000 tonnes, figures Benson Quinn Commodities termed "tepid".
"Last week we managed to move one cargo of old crop, so just
about anything over zero will be an improvement," the broker said.
It added that "for corn to get a story, a sub-160 bushels
per acre yield needs to be in play.
"At the moment most all pundits will be north of that number."
Corn futures for December dipped 0.5% to $3.89 a bushel.
'Forecasts of rising
Among other markets, palm
oil extended its decline in Kuala Lumpur from near-four-month highs set on
Monday, with the September lot down 1.1% at 2,613 ringgit a tonne.
Oriental Pacific Futures flagged "forecasts of rising output"
in Malaysia as spurring market concerns, with official data to be released next
"Output in Malaysia,
the second-largest producer of the tropical oil, is seen rebounding in July in
line with the seasonal trend and on a post-El Nino recovery."
And in New York, cotton
futures extended their recovery, adding 0.3% to 70.54 cents a pound for
December delivery, helped by worries over erratic rains in India, a major exporter
of the fibre.