Mintec data shows that wheat prices have risen to the highest level since mid-July, driven by concerns over cold temperatures in parts of the US grain belt. Recent snowfall in the states of Minnesota and North Dakota have contributed to a rapid rise in prices, up 10.8% between the beginning of September until October 16th. This price increase proceeds drastic price declines, as the market anticipates ample global wheat stocks for the 2019/20 season. However, the extent of the damage caused by the cold weather on the US wheat crop is still uncertain.
Market participants are hoping new Chinese demand for US agricultural products will occur soon, which would support further price rises. According to the US President, China has agreed to purchase $40 to $50 billion worth of US agricultural goods which could lead to an end of trade war.
Meanwhile, the US is starting a new trade partnership, with a new agreement with Japan signed on October 7th . This agreement would increase American farmers opportunity to remain competitive in the global wheat market, as of now Japan is the third largest market for US wheat exports.