Frontrunner - 16th July 2021

US Chicago Board of Trade (CBOT) wheat futures rallied sharply this week, gaining 10% in value from last week’s three-month lows.

Persistent hot and dry weather conditions across US and Canadian spring wheat production areas look set to continue into next week and will prove further damaging for yield potential. Minneapolis spring wheat futures rose above $9/bu which is their highest since December 2012. The fast rise in spring wheat futures prices has significantly extended its premium to CBOT soft red winter (SRW) wheat futures above $2.20. In early April it was little more than 30 cents.

Monday’s US spring wheat progress report saw only 16% of the crop as good to excellent. Although this was unchanged on the week, it also saw the poor to very poor rating increase five points to 55%. On Monday, the United States Department of Agriculture (USDA) cut its US spring crop estimate by 41% on last year and cut total 2021 US wheat production by four million tonnes from its June estimate to 47.52 million tonnes, which is two million tonnes below last year.

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