- Location
- Stoneleigh
May-23 Chicago wheat prices fell to a near 16-month low yesterday, closing at $267.47/t. US wheat markets were pressured by a storm front which has brought much needed moisture, in the form of snow and rain, across parts of the Plains, which has been impacted by drought of late. EU and UK futures markets were pressured by this too, with May-23 UK feed wheat futures losing £3.50/t from Friday's close, to settle at an 11-month low yesterday of £223.25/t.
This latest bout of rain and snow fall seems to have alleviated market concerns for now, over the impact of drought on the 2023 crop. However, we are some way off being able to assess the actual damage of these conditions. As at 17 January, 59% of the US winter wheat area was located in drought, according to latest USDA data. This is unchanged from the previous week, but down from 63% as at 3 January.
While the overall percentage of the winter wheat area in drought has shrunk, the proportion in exceptional drought has remained at around 15% since the start of November. If we look at the data for the US’s top wheat producing state, Kansas, 88% of its winter wheat area is in drought. Furthermore, the proportion of area in exceptional drought has been steadily rising since November, and now sits at c.50% (as at 17 January). It will be interesting to see what impact this recent moisture will have on the area effected by drought, when the USDA release its next US drought monitor report on Thursday (26 January).
While the US winter wheat area for harvest 2023 is expected to be 11% up on the year, at the highest in eight years, the impact of the drought on the crop is yet to be fully known. The USDA weekly crop condition reports aren’t due to start up again until March. However, the next monthly reports for key growing states will be released at the end of January and will assess crop conditions up to 29 January. This will shed some more light on what impact the US drought and extreme cold conditions over the Christmas period has had on the winter wheat crop.
With the UK having a substantial exportable surplus of grains this season, UK prices are tracking global market movements closely. With that in mind, any developments with US weather and crop conditions will impact UK price movements too. US weather and crop conditions remain a key watch point as we move towards a new season.
Today's Grain Market Daily is now published - Rains on the Plains pressures prices
For information on price direction make sure to subscribe to Grain Market Daily and Market Report from our team.
This latest bout of rain and snow fall seems to have alleviated market concerns for now, over the impact of drought on the 2023 crop. However, we are some way off being able to assess the actual damage of these conditions. As at 17 January, 59% of the US winter wheat area was located in drought, according to latest USDA data. This is unchanged from the previous week, but down from 63% as at 3 January.
While the overall percentage of the winter wheat area in drought has shrunk, the proportion in exceptional drought has remained at around 15% since the start of November. If we look at the data for the US’s top wheat producing state, Kansas, 88% of its winter wheat area is in drought. Furthermore, the proportion of area in exceptional drought has been steadily rising since November, and now sits at c.50% (as at 17 January). It will be interesting to see what impact this recent moisture will have on the area effected by drought, when the USDA release its next US drought monitor report on Thursday (26 January).
While the US winter wheat area for harvest 2023 is expected to be 11% up on the year, at the highest in eight years, the impact of the drought on the crop is yet to be fully known. The USDA weekly crop condition reports aren’t due to start up again until March. However, the next monthly reports for key growing states will be released at the end of January and will assess crop conditions up to 29 January. This will shed some more light on what impact the US drought and extreme cold conditions over the Christmas period has had on the winter wheat crop.
With the UK having a substantial exportable surplus of grains this season, UK prices are tracking global market movements closely. With that in mind, any developments with US weather and crop conditions will impact UK price movements too. US weather and crop conditions remain a key watch point as we move towards a new season.
Today's Grain Market Daily is now published - Rains on the Plains pressures prices
For information on price direction make sure to subscribe to Grain Market Daily and Market Report from our team.