Last week's monthly United States Department of Agriculture report embodied both positive and negative news.
The negative news was that US wheat stock estimates were raised, as slowing export sales saw a reduction in estimated exports from the US for this year.
The global numbers were more positive though.
Production was reduced for several Middle Eastern countries including Iraq and Syria.
This flowed through to a reduction in global production of 2.18 million tonnes compared to the January estimates.
We also saw a 610,000t lift in consumption, with feed use raised for Canada, in line with their lower than expected stock levels.
Chinese consumption was lowered because of recent higher wheat prices.
Despite opening global wheat stocks being revised up by 1.05 million tonnes, ending stock estimates were reduced by 1.71 million tonnes on the back of the reduced production and increased consumption estimates.
There was a little more to it though, with stocks outside of China decreasing by 2.74 million tonnes.
This was driven by reduced consumption in China but increased consumption in Canada, so when China is removed from the data, consumption in the rest of the world was up by 1.61 million tonnes, thus driving stocks excluding China down by more than total global stock estimates.
As stocks in the US have also risen, stocks outside of the US and China have declined by even more.
Stocks in Argentina are down by 630,000t, and stocks in Canada are down by 2 million tonnes.
That leaves the balance sheet outside of the US and China quite tight.
When we add the risks to exports posed by a potential Russian invasion of Ukraine to the equation, we get a market that is very jumpy.
The ability for other exporters to fill any gap left by Black Sea exporters is limited.
The US may have some spare export capacity, but while their stock estimates have been increasing, the actual level of wheat stocks is projected to be at its lowest since 2013-14, and then we go back to 2007-08.
Coming out of the USDA report, we initially saw a modest lift in Chicago Board of Trade wheat futures, with those gains, plus some, wiped out the next night.
We then had the US suggesting that a Russian invasion of Ukraine could be as soon as this week, and wheat futures rallied sharply on Friday night.
This week could be somewhat volatile as the Black Sea tensions unfold one way or the other, and as weather issues across South America and the US play out.
In South America, production estimates for soybeans and corn are still in decline, and in the US the market is anxiously watching moisture levels in key winter wheat growing areas.
