US wheat futures have recovered some of their strength after retreating from the high reached two weeks ago, as weather forecasters predict further dry weather across the Midwest.
World Weather has warned “drought conditions intensified across the Northern spring wheat areas over from the previous week. The dry areas of the Midwest missed out of rain over the past day, and the outlook does not offer much relief for IA, MO, central and southern IL, and southern IN. ”
The bureau has reduced the chance of rain in a n area stretching from south- eastern South Dakota and north-eastern Nebraska through south-eastern Iowa to central and southern Illinois. It has also extended the problem area south to east-central and south-eastern Missouri.
Analyst Futures international (FI) estimates the US spring wheat production for 2017/18 at a maximum 402 million bushels, in line with the USDA figure, although it reports an Informa figure of 400 million bushels
FI noted that all three US wheat futures markets ended higher on the weather news after a mixed to lower start. Chicago wheat closed at $5.0525/bushel. While marginally down on the day it is up on the $4.94/bu a week ago (July 14th) but down on the July 5th high of $5.39/bu.
Turning to other major crop producing regions of the globe, World Weather notes that eastern Ukraine and the lower Volga River Basin will be dry this week; western and south Australia will see net drying, which will impact canola, while in South America both Argentina and Brazil will remain dry until the end of the month. But northern Russia, western Ukraine and portions of Europe and India will see more favourable weather patterns.