Wheat futures in the US jumped to its two-month high. The hard-red winter wheat crop’s total shortfall resulted from inadequate rain and warmer temperatures in Northern Kansas.
Also, a mix of technical buying on May’s first days and worries about crop prospects in the breadbasket of the southern Plains affected the price jump.
Kansas is the second largest, behind Russia, wheat producer and exporter in the world. Drought in the southern Plains resulted in a 25 percent up so far in the wheat futures this year.
Chicago Board of Trade for July delivery jumped 18 ¼ cents to $5.28¾ per bushel. Wheat futures in Kansas City also rose 15 cents to $5.52½ per bushel.
Furthermore, Wheat Quality Council data showed that yield potential for 2018 slipped slightly from the tour’s average in 2017. Yield potential in fields this year averaged 37.8 bushels per acre on countries Riley, Clay, Cloud Republic, Jewell, and Smith. Last year, the average for the same areas is 38.8 bpa and the average for five years is about 42.9 bpa.
Wheat had the biggest surge on a percentage basis. This was driven by short-covering and uncertainty about the size of the US winter wheat crop. Commodity funds hold a net short position in CBOT wheat futures, leaving the market vulnerable to short-covering rallies.
Kansas Wheat Tour Started
The annual Kansas Wheat Tour happened yesterday morning, US time, in Manhattan, Kansas. Some of the 94 participants reported that the uncertain cool and dry weather has slowed the plant growth. They also said that wheat plants were short and immature, and soils were dry in the northeast and north-central Kansas.
Others are concerned they would find even worse fields in the next two days as the event continues.
Justin Gilpin, CEO on the Kansas Wheat Commission, said, “Typically, harvest time for this wheat would be in about six weeks. Plants to need make a head and fill out the grain kernels. The window of time to do that is closing.”
Meanwhile, Dave Green of the Wheat Quality Council said, “The wheat (in the northwestern part of the state) looks healthy, but it’s short. The cold weather is causing problems. There’s still a chance that it could be a really good crop, but it better start raining.”
He added that without rain, fields in the area will yield 20 bushels an acre, but if precipitation makes its way to the ground in the next month, growers could see 50 bushels an acre in that part of Kansas.
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