The US wheat market appears torn between harvest pressure and the impact that recent flooding will have on both supply and quality. Wheat futures were having none of it, harvest supply pressure the main influence, and generally winning out. It’s crazy to see flooded US spring wheat fields on one screen, and falling spring wheat futures on the other screen.
Soybeans seemed to have a win, Chicago futures were higher across the board. The Jan25 slot for soybeans at Chicago put on 9.5c/bu (AUD$5.24/t) that’s not a lot but indicated that the trade appear more worried about beans than corn or wheat going forward. Around 90% of the projected soybean acres in the US have now emerged. The G/E rating of the US soybean crop was estimated at 67%, back 3pts from last week. I doubt this takes into account damage down by recent storms and flooding over the weekend, nor would it account for what is likely to be another wet week for much of the Midwest.
The worst of the flooding is generally around the Iowa / Minnesota border and SE S.Dakota, but there is also reports of local flooding across parts of rest of these three states too. The soybean condition rating in Iowa remained at 74% but the numbers were shuffled a little 59/15 G/E last week vs 61/13 G/E this week. Corn condition in Iowa was actually higher, last week rated 56/15 – 71% G/E, this week 62/15 – 77%. Corn does like a drink much more than soybeans, I can’t see this rain being terribly bearish US corn in the long run.
Wheat is interesting. There’s not a lot of talk about damage to US SRWW wheat yet although the major soft red winter wheat region is seeing heaps of rain and the modelling suggest another inch or two this week. Soft red winter wheat makes up about 20% of the US crop and is grown mainly east of the Mississippi with Indiana & Michigan the major production states. SRWW in both these states is 100% in head, Indiana is 39% harvested but Michigan is yet to start harvest. The G/E rating in Indiana this week is 58/21-79% (61/18-79% LW), if anything improving week on week, we’ll see how that goes in next Tuesdays report. Michigan is another story though, the G/E rating there falling 4pts this week to 76%. It’s hard to see that being sustained into next week though.