Crop worries spur wheat price jump to highest in more than a year

The wheat rally ignited, lifting prices to their highest in a year or more, as concerns over 2026/27 crops encouraged an injection of risk premium.

 

A further rise in crude oil prices provided a tailwind for grain markets.

 

Brent crude added 2.5% to return above $110/Bbl for the first time in three weeks, buoyed by the continued slow pace of shipping through the Strait of Hormuz. Short-term supply worries trumped the boost to long-term production prospects from the United Arab Emirates’ announcement that it is to quit Opec, freeing it of the cartel’s output strictures.

 

Wheat prices gained extra impetus from a turn drier in the outlook for the US Plains, with weather models reducing the area of drought-tested winter wheat expected to receive rain relief.

 

Although Texas and Oklahoma will receive rains over the next week, skies will remain clear further north in the Plains, including in top wheat-growing state Kansas.

 

USDA data overnight revealed some further deterioration in wheat condition in the Plains, which grows hard red winter wheat. Although the headline reading held at 30% of overall US winter wheat rated “good” or “excellent”, the proportion rated “poor” or “very poor” rose by 2 points week on week to 35%.

 

The USDA said that “more than one-half of the winter wheat was rated very poor to poor in Nebraska (65%), Texas (56%), and Colorado (54%),” which are all Plains states.

 

Adding to concerns over prospects for harvest-26 is a slow pace of plantings in Russia, where cold weather has slowed spring wheat sowings to 200Kha frm 1.5Mha a year ago, SovEcon reported, and the high fertiliser prices which are curtailing expectations for sowings in Argentina and Australia.

 

Cool weather is reported to be hampering the start of Canada’s spring wheat plantings too, while the US reported its spring wheat sowings at a below-average 19% complete as of Sunday.

 

July-26 futures in hard red winter wheat, as grown in the US Plains, soared 3.4% in midday deals, topping $7.00/Bu at one point for the first time since June 2024 for a best-traded contract. Buying was encouraged, as in many other wheat markets, by the break in futures above technical resistance levels, in this case $6.80/Bu.

 

Minneapolis spring wheat for July-26 held above $7.00/Bu to record its own 22-month high.

 

The gains pulled Chicago-traded soft red winter wheat – the world benchmark, as grown in the Midwest where moisture is more ample – up 3.4% to exceed $6.50/Bu also for the first time since June 2024.

 

In Europe, Paris milling wheat for Sepember-26 traded up 2.3% in late deals, to hit a one-year high for a best-traded contract basis.

 

London November-26 feed wheat futures gained 2.3% to settle at £189.25/t, a 14-month closing high for a best-traded contract.

 

Buying spilled over too into some other markets. Chicago corn futures for July-26 added 0.9%, while Paris rapeseed futures for August-26 gained 0.8% to hit the contract’s highest in nearly two years.

 

Rapeseed is being supported too by factors such as strength in rapeoil values, as analysed in detail in CRM Agri’s Weekly Oilseeds Outlook.