Even after the US Department of Agriculture (USDA) upgraded its 2020-21 global wheat production forecast to 773.1 million tonnes last Friday, global wheat prices opened this week with Chicago Board of Trade (CBOT) wheat trading near to US600 cents per bushel - and at five-year highs.
Non-commercial (fund) interest in the market continues to be a key price support, with net long CBOT wheat positions gaining 40 per cent last week.
But it is dry conditions across key production regions that are providing fundamental support.
The dryness in South America and the southern US are causing concern, but the dry in Russia is giving the market the most to think about.
The key winter crop regions of Russia - the Southern and North Caucasus, which account for close to 60 per cent of the country's winter wheat crop - have had the driest September-October period in nine years.
This has some consultants in the region already cutting the estimated winter wheat area that will be harvested in 2021 by 10 to 15 per cent.
The ideal planting window for the Russian winter wheat crop is almost closed.
Planting can continue, but later sown crops run the risk of not being sufficiently developed to withstand adverse conditions during winter dormancy.
The expected lower planted area and increased vulnerability of the crop to winter are causing concern in the market that Russia might, for the first time since 2012-13, have a wheat-crop failure.
In 2012-13, Russia's wheat crop dropped to 37.7 million tonnes - which was a 33 per cent year-on-year decline - and its exports fell to 11 million tonnes - which was down almost 50 per cent year-on-year.
At the time, Russia's wheat exports had been about 9 per cent of global wheat trade.
Within a tighter global balance sheet, Russia's downturn was enough to contribute to the CBOT wheat price moving above US800c/bu - and even finding US900c/bu for a short time.
For the past five years, Russian exports have accounted for an average of 18 per cent of global wheat trade.
So, a Russian downturn now has the potential to deliver a much greater shock to global wheat prices.
Winter wheat typically accounts for about 75 per cent of Russia's wheat crop, so the potential for this dry autumn period to significantly damage Russia's 2021 wheat prospects is real.
But the USDA - and many others - have not discounted Russia's wheat prospects for this year.
In fact, a five million tonne upgrade for Russia was part of the USDA's latest global estimates report.
There are several reasons behind this still-buoyant view.
The first is that only last year, similar concerns were held for parts of Russia at this point of the season - and yet the country still harvested its second-highest volume of grain on record.
Some additional spring wheat can be planted if all winter wheat hectares are not planted.
Russia's wheat production systems have improved considerably since 2012-13 due to factors such as better variety selection, superior soil management and improved in-crop management. These are all part of a more resilient wheat production baseline.
And some rain - albeit not widespread - is now forecast for coming weeks.
So, if all goes well and the weather becomes favourable, Russia can still harvest a decent wheat crop in 2021.
But, as we know all too well in Australia, without rain even the best management cannot avoid a disaster.
Markets will continue to watch the Russian rain forecasts in coming weeks.
