Chicago wheat futures posted gains for the sixth straight day on Thursday, with the market now almost erasing all the declines seen since the beginning of the year.
With a 7 ½-cent gain today, the July contract now sits at $6.20 ½. That is only about 6 cents off the Jan. 2 close - when the market fell heavily - and represents about an 80-cent gain from the March low of just below $5.40 (see July futures chart below).
Wheat has moved sharply higher over the past number of days amid increasing concern about the weather for winter wheat crops in both the US and Russia.
Monday’s USDA crop progress report pegged the nationwide winter wheat crop at 50% good to excellent as of Sunday, still the highest since 2020. However, flash drought conditions in No. 1 producer Kansas, as well as Oklahoma, have sent condition ratings in those two states spiraling lower the past two weeks.
A bout of extreme weather, including heavy downpours, thunderstorms and high winds, is forecast to kick off in the central Plains today, but the most significant precipitation is expected in the more eastern and northern Hard Red production regions. On the other hand, areas from the western Texas Panhandle into southwestern Kansas are likely to miss out - at least for now.
Meanwhile, portions of southern Russia have not seen meaningful precipitation since February. And with some daytime highs already touching 30 degrees C, winter wheat crops are under stress.
A report yesterday from World Weather said precipitation will remain limited for southern Russia through the middle of next week, with temperatures continuing well above normal.
“Substantial rain will be needed soon to prevent this trend from cutting into production potentials, but there is a fair chance that this pattern will return later this year after a short-term bout of relief in early May,” World Weather said.
July Chicago Wheat: source - Barchart
