Drought in 76.7 percent of Kansas, the top wheat-growing state in the United States has been a major boost to wheat prices, particularly in the US, according to official data.
In fact, it had earlier been predicted that wheat production areas would receive little rain, which had made wheat prices firm in the market.
“US hard red winter wheat production areas will receive very little rain over the next 7-10 days,” Terry Reilly, analysts at Futures International had said.
However, “there is talk that US hard red winter wheat country will turn more active in late March into April with rain falling across Colorado to northern New Mexico into the western Great Lakes region and upper Midwest.
“This pattern change will also provide some rain for the dry areas of the southwestern Great Plains,” which may halt the bullish run of the commodity.
According to David Tolleris of WxRisk.com, the jet stream patterns “means that the active and convoluted weather pattern will likely continue for the next 2 or 3 weeks, at least, adding that there are indications that by the end of the month pattern will begin to change and a developing trough in the jet stream over the western one-third of the country may bring about even normal or above-normal rain for portions of the drought areas of the lower plains.
Prices of soybeans and cotton, another big Chinese import from the US fared relatively well.
New York cotton futures for May added 0.5 percent to 83.40 cents a pound, helped in fact by some worries over China’s own output this year.
“Producers in Xinjiang,” China’s top cotton-growing state, “are reportedly concerned regarding further subsidy payments, which have yet to be announced,” said Louis Rose at Rose Commodity Group.
For soybeans, they added 0.2 percent to $10.50 ¾ a bushel in Chicago for May delivery, boosted by a further recovery in values of soymeal.
Soymeal of which Argentina is the top exporter, making prices particularly sensitive to drought in the South American country gained 1.0 percent to $379.10 a short ton.
Another theme said to be live in financial markets, including agriculture grown soft commodities, Wednesday was that of potential trade wars, with the decision by President Donald Trump to sack Rex Tillerson as secretary of state viewed by some as a potent of enhanced trade tensions.
Tillerson’s successor, Mike Pompeo, is seen as far less likely to stick up for free trade.