Blog: The Wheat Sheaf

US Crop tour results support wheat markets, barley shows limited strength

USDA crop progress report for the week ending May 24, 2020 show US spring wheat seeding progress reached 81% planted over the last week. This progress is still lagging behind the average. The 5-year average seeding progress for this week is reported at 90% for comparison. The percent of the US winter wheat crop rated good to excellent was 54%, a 2% increase from the previous week and lower than the 62% reported at this time last year.
 
The North American wheat futures market continued to show improved pricing as weather concerns from last week continue. Dry conditions continue to be cited as a concern for crops in multiple export regions this spring. Recent US crop tours of the Kansas winter wheat crop noted damage from dry conditions, April frosts, and stripe rust which resulted in a reported yield estimate below USDA expectations. The Minneapolis and Chicago wheat markets continued to hold the gains from last week, while the Kansas wheat market rode the poor tour results to continue an upward price trend. 
 
Feed prices in Alberta reversed their slow decline last week, returning to values just below recent highs. Forces holding up the prices likely include increased feeding demand from a backlog of cows waiting to be processed, pent up export demand of barley to the west coast due to rail disruptions earlier this year, and additional demand from China due to an 80.5% tariff on Australian barley imports to China for the next five years. There has been no reported improvement in malt barley sales yet.
 
Reports from the government of Alberta had seeding progress for all crops as of May 19th at 61.8%. Year over year progress was regional with Southern, Central, and North East regions showing progress ahead of average. Cool and wet conditions in the North West and Peace regions continue to hamper progress, resulting in these regions lagging behind their average progress.

 

Resources: For a further update on the wheat markets see the most recent Market Insider article.

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