The USDA weekly crop progress report came out after the close, so it’s not responsible for the sharp rally in US wheat futures….. yet.
The rally was said to be technical in nature but also gathered fundamental support from the Russia / Ukraine war and dry conditions persisting in parts of the US hard red winter wheat belt. Dry weather is starting to become a feature in not only the US but also in parts of Canada, Western Australia, Southern Russia and some parts of Eastern Ukraine.
With the last CFTC report indicating that the funds increased their wheat net short by 8,606 contracts to 171,340 contracts, that’s short 23.3 million tonnes of soft red winter wheat at Chicago, then you can understand their desires to get “technical coverage”, if the physical market starts to show some production issues. The managed money short rolls across all three wheat futures contracts, so they have a lot of exposure in all grades.
Although US cash values out of the PNW followed the futures market higher the same could not be said for values out of the Black Sea.

The bullish nature of the weekly crop condition report for wheat should continue to see some interest from those short futures overnight and tomorrow, regardless of the poor export performance of the US. Today’s report confirms that 26% of the Kansas HRWW crop is now rated Poor / Very Poor, that’s up significantly from last weeks 19%. The US winter wheat crop G/E rating fell 5pts week on week and is now pegged at 50%. Kansas the US No1 wheat state is rated at 36% G/E. Around 4% of the Kansas HRWW crop is now in head. Dry weather now is not ideal, there is the chance of rain across much of central and eastern Kansas over the next 7 days but they are also expected to see above average temperatures leading up to this rain, advancing the crop quickly. If the rain does come it should put a brake on the declining crop conditions across Kansas and Oklahoma. The change may also bring good falls to Iowa, corn sowing there was pegged at 13%, some 5pts above the 5 year average, so some weather delays there could be just what the market needs.