Chicago wheat futures price jumped at the end of 16th July, supported by weather concerns across major exporters. Crop estimates for both the US and Canada are dropping as hot and dry weather continues to impact wheat areas in the northern US and Prairies. July estimates for the 2021/22 US wheat yield fell to 3.08 t/ha compared to 3.41 t/ha in June, according to the United States Department of Agriculture (USDA). As a result, the CBOT wheat December contract charted at USD 257/MT on 16th July, up from USD 229/MT seven days prior (+12%).
Spring wheat crop condition in the US fell to 11% good-to-excellent compared to 16% the previous week, and significantly lower in comparison to 68% good-to-excellent for the same period during the previous year, according to the USDA’s new crop progress report released on 19th July.
Adverse weather conditions both in Europe and Russia have also increased concerns over global wheat supplies for the 2021/22 season. Russian 2021/22 wheat yields are increasingly expected to be smaller by participants. Arid conditions and early yield in Southern Russia have been far below prior market expectations.
The wheat market is projected to continue being driven by weather developments, and production estimates are likely to continue to be revised down, thus setting a futuristic bullish trend for the end of 2021.