WMR-U.S. Futures Market Trends
Posted: Oct 08 2020
Prices at all three U.S. wheat futures markets have rallied off their August lows, and are higher than a year ago. Tightening world wheat fundamentals, cross commodity support from corn and soybeans, and good early season U.S. export sales have all been supportive factors, across the entire wheat complex. The price spreads between the wheat classes is somewhat unique however, with Chicago at a premium to Minneapolis, and the winter wheat markets seeing a stronger level of price appreciation. This trend in market spreads may hold for a period.
Available supplies of each class of wheat are a major influence in recent price trends, along with shifts in production by key competitors for each class. Both hard red winter and soft red winter supplies are the tightest in five years, due to more challenging production seasons in key states, and a sharper drop in planted acres. Hard red spring supplies are at the highest level in five years due to very favorable production seasons with consecutive years of record to near record yields, and more stable acres. In addition, two strong production years in Canada have added pressure to spring wheat prices, whereas a smaller European crop is supportive of the winter wheat complex.