Wheat surges 3% on US drought and unfavorable Russian weather hurting exports 📈

Wheat futures on Chicago Board of Trade (WHEAT) surges almost 3% today, reaching a key technical level as global trade tensions persist. What's even more important today, U.S. farmers experience warm and dry weather, allowing for early planting but limiting a total wheat planting potential. This drought stress building for hard red winter wheat in the U.S. Plains, with another 10–12 days of rain-free, hot weather expected.

• Russian wheat farmers hit by hail, worsening ongoing drought problems and reducing the availability of Russian wheat for export. Wheat prices also gain bullish traction due to dry conditions in the Black Sea region, according to AgResource analysis, citing by Bloomberg. Not only wheat, but also CBOT soybean futures rise on unexpected non-China demand.
• As for now, U.S. wheat supplies are up due to increased imports, the highest since 2017/18 season, while exports have been revised downward. The U.S. ending stocks are projected 22% higher YoY. The season-average farm price remains at $5.50 per bushel. Globally, wheat supplies and trade are both expected to decline (lower EU output, slowing exports from Russia and Australia). Despite that, global ending stocks are slightly up (but remain at their lowest level since 2015/16).

Yesterday, CBOT wheat declined slightly due to higher USDA wheat stocks estimates. US wheat ending stocks were increased by 27 mbu to 846 mbu. The report came in  above estimates and came as imports were up 10 mbu, exports trimmed by 15 mbu and seed trimmed by 2 mbu. Also, USDA increased the world ending stocks, by 0.62 MMT to 260.70 MMT.

WHEAT (H1 interval)

Source: xStation5