World stocks of wheat have been at low levels for quite sometime. Last year's poor crop around the globe dropped stocks to record lows, and a rebound in wheat production is needed this year. Estimates for the U.S. crop are bigger than they've been in more than a decade, but other wheat growing areas must step up production as well.
Russia announced Monday that their wheat harvest this year will be 10% above last year at more than 50 million metric tons. So it would appear the Northern Hemisphere is rebounding from last year, but questions still remain in the Southern Hemisphere.
Argentina is currently planting its wheat crop, but the farm strike may keep planting at lower than needed levels. Also the government is setting quotas for wheat exports next year to help ensure domestic supply.
And then there is Australia. Limited rain has dropped farmers' confidence in a substantial production rebound from the last two year's disappointing harvests.
"Overall May was short on moisture for planting Down Under," says Farm Futures Senior Editor Bryce Knorr. "That bears watching, because the world is counting on a big Australian crop to help rebuild the world wheat supply."
Queensland in eastern Australia did receive some much needed rainfall earlier this week, but the question of rainfall places a heavy burden on Australia's back.