Drought in Russia's main winter wheat production regions and the La Nina-driven threat of a wet Australian wheat harvest presents a volatile mix for global wheat prices in the coming weeks.
US Chicago Board of Trade (CBOT) wheat futures gained 5 per cent last week, posting new six-year highs after Russia's weather forecasts turned drier - removing chances of much needed rain to germinate winter wheat crops before freezing temperatures arrive in the lead-up to winter.
The Southern Districts, which is the heart of Russia's wheat belt, has recorded its lowest rainfall in the period from August to early October for the past 30 years, which is casting doubts about the size of next year's crop.
Uncertainty over Russia's 2021 winter wheat crop has stalled farmer selling on the current crop as they wait for rain.
World wheat prices have jumped 15 per cent in the past four weeks amid supply uncertainty.
Strengthening world wheat prices at the onset of the harvest window is welcome news for Australian farmers, where the focus has turned to harvest and grain quality.
La Nina-related unsettled weather has raised the risk of rain during the harvest window -and potentially quality downgrades.
Global traders will also be watching Australian's harvest weather, nervous about a major quality downgrade.
Russia's weather problems have increased the importance of the Australian wheat crop to cover a larger share of global importer needs.
International wheat importers will be far more dependent on Australian wheat, as exporters struggle to purchase wheat from tight-fisted Russian farmers.
A wet harvest here would only add to the current global price volatility.
Unsettled weather has slowed harvest progress across southern Queensland and northern New South Wales.
The threat of storms and rain has turned the 2020 harvest into a race against nature to get crops harvested and into storage before the inevitable major rain event.
Farmers have been watching storms from their headers, just hoping they would be missed.
Most of southern Queensland has received five to 15 millimetres in the gauge in the past week.
Wheat quality in southern Queensland has been good, with farmers reporting high protein. Most is going Hard 2 and Australian Prime Hard 2, with some Australian Prime Hard 1.
Farmers have been content to sell barley for cash and hold wheat.
Uncertainty over grain quality - with the increased chance of a wet harvest - has slowed farmer selling, putting upward pressure on local prices.
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