Weather news continue to work in wheat’s favour.
Another dry week was recorded in the southern U.S. winter wheat belt and as of the beginning of this week, the 10-day forecast saw no chance of rain.
Meanwhile, European markets were watching the thermometer in Eastern Europe, Russia and Ukraine, concerned about the impact of cold weather on the winter wheat crop there.
Back in North America, U.S. spring wheat analysts are speculating on acres shifting out of wheat into soybeans. They note that U.S. spring wheat has suffered a lot of fusarium damage in recent years. Also, although soybean prices are not strong, the crop has many market uses and it is less costly to seed because it produces its own nitrogen.
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On the demand front, analysts expect Iraq will buy about a million tonnes of wheat in the near future, probably from the United States.
Also India says it will soon buy about 500,000 tonnes of wheat, the first such purchase since 1999. It is buying to make up for a shortfall in last year’s crop. India has a good crop in the field now and is not expected to continue importing once the harvest begins.
All this helped drive the Kansas City hard winter wheat March contract to $4.17% on Feb. 6, up from $3.98 Jan. 30 and $3.80 on Jan. 23. That is about a 10 percent increase over two weeks.
Unfortunately, a recent report on China’s winter wheat crop did not add to the momentum.
The U.S. Department of Agriculture on Jan. 27 reported China’s crop has enjoyed mostly good moisture and snow cover.
China’s agriculture ministry put winter wheat acres at 53.03 million acres, slightly more than last year.ÊThe preliminary area estimate from the National Bureau of Statistics was somewhat lower at 52.12 million acres, about the same as last year.
The USDA will make its first forecast of China’s winter wheat crop production in May.
The market news was not as good for oilseeds. Early this week there was a series of government and private forecasts for Brazil’s soybean crop. There were slight adjustments, but if favourable weather continues, it appears the South American giant will produce a record crop of about 57 to 58 million tonnes.
Argentina’s soybean crop has enjoyed rain recently and is also expected to be a record.
