US winter wheat rating dips following dry weather: Grain market daily

• UK feed wheat futures (May-24) closed at £182.35/t yesterday, down £1.10/t from Friday’s close. New crop futures (Nov-24) closed at £205.35/t, also down over the same period by £2.75/t.
• UK feed wheat futures followed Chicago wheat futures down yesterday, amidst some potential relief from the dry weather seen in Russia recently. Rain has been forecasted in key Russian crop producing regions, providing some easing to supply worries.
• Paris rapeseed futures (Nov-24) closed at €471.75/t yesterday, up €4.75/t from Friday’s close. The last old crop contract (May-24) closed at €447.50/t yesterday, up €7.25/t over the same period. May-24 futures finish trading today.
• Rapeseed followed soybeans up yesterday. Soyabeans had support from technical buying and the potential for fewer acres being shifted to soyabeans due to the current pace of maize planting. Weather concerns in Brazil also lent support to the market, with stress worries for later planted soyabean crops.

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Yesterday the US Department of Agriculture (USDA) released its weekly crop progress report. It showed another drop in US winter wheat crop ratings, albeit marginal, with 49% of winter wheat currently rated in good-to-excellent condition, down 1% from last week. However, it should be noted that this figure remains the highest for the time of year since 2020.

In 2023, winter wheat condition scores for the same week were 28% good-to-excellent, 21% lower than the current rating. Additionally, 19% of last year's crop was rated very poor, compared to just 5% this year.

Reports of drought have expanded across the US winter wheat belt, with growing worries regarding its impact on crop condition and yield. The USDA reported last week that 30% of US winter wheat was located within areas currently some degree of drought as of April 23. This is up from 24% in the previous week and 18% two weeks previously.

The US drought monitor showed that in the top winter wheat producing state, Kansas, 65% of the state was going through a period of drought, albeit moderate. This was up from 53% the week prior.

The winter wheat harvest is expected to begin next month in the southern states. Some rain is forecast over the next week, however the exact level remains to be seen. Soil moisture levels and temperature will be crucial as more winter wheat crops approach their reproductive stages. At current, 30% of winter wheat in the US has ears fully emerged, up from 17% last week and the 9% above the average for 2019-2023.

The exact scale of impact current weather conditions being seen globally in key wheat producing countries in currently unknown. Currently the International Grains Council expect a global surplus of grains in 2024/25, though the margin for error is small and wheat stocks are low. It will be important to continue to watch weather conditions in key producers in the weeks ahead.

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