David Sheppard, Gleadell’s managing director, comments on the wheat market

All markets continue to ease as the reality of ample supplies, reports of improved weather and general bearish fundamentals weigh on values. US markets have fallen $12/t over the week, pressured by a firm US dollar and the relative slow export pace.

Exports are running at 58% of the season's projection, and need to increase significantly to over 550,000t per week to meet the current USDA figure. Although futures and US export prices have declined, US wheat is still priced between $8-15/t above European supplies.

In addition, reports of better crop estimates out of Argentina could push the government to release additional export licenses, while Ukrainian officials project wheat exports 1.8mln t higher than the current USDA estimate. That could easily offset any further decline in Russian exports, assuming internal politics do not affect grain movement.

EU prices have eased, trading down €9/t on the week, despite exports continuing their strong pace. Talk of potential changes to Egypt's buying spec, which could affect French supplies, added to the bearish tone. Cheap Polish and Romanian wheat continues to undercut Black Sea prices and, with the Russian interior market remaining firm, little or no grain is going to government intervention, with no takers.

Election results in Greece and the potential debate over the re-alignment of the country's debt continue to throw uncertainty over the euro. Some experts believe Greece's exit may even support the failing currency, but if Greece goes, who else follows?

UK values, as a result of a stronger exchange rate, continue to weaken, down £7/t on the week. The recent rise in sterling has done little to improve the UK's competitiveness on export markets, and with a marked surge in exports required to reduce the already larger-than-normal carry-out, the UK market needs to move lower to compete with alternative feed grains – especially maize – that is readily available across much of the EU.

In summary, US markets this season have built in every premium going, whether linked to weather, politics, export/supply issues or new crop worries. In most cases, the reality has been far removed from the rumour. It seems the US is starting to feel the pain of the resulting high price through its slow export pace.

Black Sea export restrictions no longer figure in the market as additional supplies are readily available from other key exporters. Although there could well be new crop weather problems, these would have to translate into major crop losses to change current market sentiment. There is no shortage of old-crop cash wheat, so new crop is currently not an issue.

• IGC raises global corn production 10mln t to 992mln t; wheat left unchanged at record 717mln t
• Traders agree with Ukrainian agriculture ministry to limit milling wheat exports – total exports seen at 12.8mln t (above USDA estimate of 11mln t)
• Analyst IKAR estimates Russia’s 2015/16 grain production at 86mln t (104mln t this season) – wheat at 50mln t (59mln t this season)
• Canadian 2015/16 all-wheat production estimated at 30mn t, up from this season – stocks projected near record low
• Ukraine exports 8.6mln t of wheat so far this season (since 1July) – 8.7mln t of corn and 3.8mln t of barley also shipped
• Ukraine reports 72% of winter grains in good condition, 18% as weak, with 97% of planted area emerged
• Argentina’s agriculture ministry increases 2014/15 wheat production to 13.9mln t – talk of additional export licences being approved