Last week ended with Chicago Board of Trade futures going sideways for the week, with Australian dollar future values only impacted by a small rise in the Australian dollar.
The nearby May CBOT contract closed on A$411.91 a tonne, while December futures held at A$413.32/t.
The week also ended closer to armed conflict in Ukraine, and the expectation that once conflict breaks out, exports from Russia and Ukraine will face disruptions.
Russia has become the world's largest exporter of wheat, and is a major supplier of other grains, as well as fertilisers, gas, oil, and aluminium among others.
Wheat is the most critical of the grains for Australia.
Russia is supplying 35 million tonnes to the export market this year - that is 17 per cent of global export sales.
When we add 24 million tonnes from Ukraine, the total jumps to 59 million tonnes, or 29pc of total global exports.
The combined exports from the EU are 37.5 million tonnes.
Then we have Australia at 25.5 million tonnes, the US at 22.05 million tonnes, Canada at 15.2 million tonnes, and then Argentina with 14 million tonnes.
If we were to lose 4 million tonnes of wheat exports from Russia and Ukraine in the short term, importers will need to turn to the other exporters and therein lies the problem.
Even without that disruption to the flow of exports, stocks in the US are down 5.4 million tonnes year-on-year, EU stocks are down 1.05 million tonnes, and Canadian stocks are down 2.55 million tonnes.
Stocks are tightening sharply within the major exporters, limiting their ability to cover a sudden short-term drop in exports from Russia and/or Ukraine.
If we look at where exporter stocks are being held, it is within the US (17.63 million tonnes), and the EU (9.88 million tonnes).
Combined stocks held by Canada, Australia and Argentina add up to 9.75 million tonnes.
The market is assuming that US stocks will be able to cover any shortfall, hence the strength in US wheat futures in anticipation that a disruption to Black Sea exports will see importers turn to the US.
There are three problems with this.
War may not break out, although no-one really believes that at the moment.
Another is that exports from the Black Sea may not be interrupted anyway.
The biggest disruption may be from western sanctions against Russia, rather than from the physical movement of grain.
A third is that while it looks as though there are available stocks in the remaining exporting countries, there is a limit to how low stocks can go.
Australia might have 4.53 million tonnes of carryover stocks, but can any of that actually hit the export market within the next three months?
