US wheat crops are facing increasing challenges as drought grips key growing regions. Meanwhile, market prices react to both weather concerns and currency fluctuations.
In the US, drought is causing damage to wheat. Additionally, a weaker euro is supporting wheat prices.
Euro strength affects prices
On the futures market in Paris, the price of wheat for the first expiring contract in May jumped from €191.25 per ton on Friday, April 17, to €195.75 per ton on Tuesday, April 21. Also at the CBOT grain exchange in Chicago, there was an upward trend at the beginning of this week.
Futures markets see price jump
This increase was due to a cold spell that raised fears of further damage to wheat in the US. Key growing regions, such as Kansas, Oklahoma, and Texas, have been struggling with drought for weeks. As of April 14, 68% of America’s winter wheat acreage was in an area affected by drought; this is twice as much as the previous year.
Crop conditions decline sharply
In the Crop Progress Report published by the US Department of Agriculture on Monday, 30% of winter wheat areas in the US were rated as good to excellent. That is 4% less than a week ago and 15% less than a year ago.
Kansas wheat quality drops
In Kansas, the most important winter wheat state in the US, only 24% of the wheat was rated as good to excellent. A week earlier, this was still 32%.
