Futures contracts wheat stocks rose in overnight trading on concerns about adverse weather in the southern U.S. Plains and parts of Brazil. Little to no rain was recorded in southwestern Kansas and parts of Oklahoma and Texas over the past week, the National Weather Service said.
The data is concerning as Kansas, the largest producer of winter wheat in the US, faces worsening drought conditions, which currently affect 53% in the state, up from 46% the previous week and 21% three months ago, according to the US Drought Monitor.
Dry weather affects wheat in Argentina and drives up commodity prices
In Oklahoma, the situation is similar, with 61% of the state in drought, compared to 57% the previous week and 22% three months ago. The dry weather is not restricted to the U.S.. In Argentina, conditions are also worrying. According to the Rosario Grain Exchange, the dry weather is threatening the country’s wheat crop, affecting a critical stage of growth. It is estimated that Argentine producers could lose more than 10% of the wheat crop, as 72% of the growing area is facing drought, an increase from 64% the previous week.
On the Chicago Board of Trade (CBOT), December wheat futures rose 8¢ to $$ 6.02 3/4 per bushel. On the Kansas City Board of Trade, they rose 9¢ to $$ 6.12 3/4 per bushel. Corn futures also rose 2 1/4¢ to $$ 4.23 per bushel. November soybean futures rose 5 1/4¢ to $$ 10.21 1/2 per bushel. Soybean meal also rose 2.50¢ to $$ 325.50 per short ton. Soybean oil, on the other hand, fell slightly 0.07¢ to 43.02¢ per pound. While meal has increased in value, soybean oil has followed in the opposite direction, keeping the market on watch.
Source: Leonardo Gottems | agrolink
