On Wednesday, wheat futures spiked as the winter season’s grains entered their late growth stages while spring planting progressed.
Wheat contracts for July delivery went up by 0.73% to $676.90 per metric ton on Wednesday’s Asian afternoon session. It’s higher than the $672.00 from the previous close.
Despite steadily slowing prices over the previous year, changing weather patterns prompted a reversal. As of May 13, the July Chicago Board of Trade or CBOT grain futures jumped from $5.53 to $6.87 a bushel.
Weather conditions are vital to global grain markets, and their developments are closely watched as the 2024 harvest approaches.
Moreover, the US Southern Plains raised concerns about this year’s production prospects amid recent weeks’ dry and variable conditions. While this may keep prices up, improvements and potential rains in drought-afflicted areas can offset the impact.
Likewise, dry and windy patterns worsened in Colorado, Oklahoma, and Texas, affecting wheat production.
Overall, weather conditions in America maintain their quality, with 50.00% of the winter crop graded good to excellent.
As the winter grain posted its significant weekly gains, following USDA’s projected larger supplies, its futures jumped higher to the end of the week.
Additionally, a slight increase in domestic use, more robust exports, and higher stocks reported in its monthly supply-and-demand report contributed to wheat’s rally.
Russia Drives Wheat Prices
Analysts question Russia’s ability to produce sufficient wheat this year to lead global exports and keep prices low.
Watching the upcoming weather, shaping the grain’s outcome, they spotted indications that that country’s crop will face issues.
SovEcon, a prominent Black Sea agricultural market research firm, reported its wheat forecast. The data showed the crop’s decline by 3.4 million tonnes to 89.6 million tonnes.
The head of the research group stated that after a favorable Russian winter, the nation was on track for a significant harvest.
Also, Southern Russia is accountable for almost 40.00% of Moscow’s wheat. Experts say adverse weather conditions deteriorate crops, piling onto earlier droughts.
