The punters at Chicago didn’t like the look of the US weather map. Forget about the Black Sea Corridor it’s about to get hot in the US corn belt. Forget that it’s about to get hot for the first time this season, forget that many of the drier regions of the US central corn belt have seen enough rain in the last 14 days to get them almost back to average, forget all that, it’s about to get hot.
The US market still amazes me, wheat futures at Chicago, that’s the SRW and HRW contracts, appeared to have been dragged higher by the action in the corn pit. While Minneapolis, the spring wheat market fell away.
This is perplexing, as the spring wheat crop is currently getting hammered by dry weather in the US and Canada………and it’s about to get hot.
Why spring wheat futures were not close to limit up is…. hard to call. World Ag Weather.com show that as little as 20% of the average rain for the last 14 days has fallen across N.Dakota, Montana and Saskatchewan, even Minnesota is starting to look dry, particularly in the upper Red River Valley, and did I mention it’s about to get hot. Maybe it’s just getting conditionally hot, like in corn, because that’s where the market needs it to get hot.
Crop condition ratings in Canada are declining quickly. Field moisture is now rated low, with just 21% of fields predicted to have adequate moisture.
China continues to import Canadian wheat, 2.7mt this year, that’s a year on year increase of 340%. China’s wheat imports have been much larger than some had predicted. Australia for example has exported over 6.2mt of wheat to China, roughly 3 times the average of the last six years.
Weather across the North China Plain has also been a little dry, many of those provinces seeing just 40-60% of average summer rainfall. Combine this lack of summer rain with the prediction of temperatures into the mid to high 30’s over the next couple of weeks and we may also see some reductions to corn and sorghum production in China this summer.