New crop wheat futures hit contract highs yesterday, with Monday’s USDA crop progress report adding to supply worries that have been increasingly growing in recent weeks.

For the week ending 15 May, just 27% of the US winter wheat crop was rated good-excellent. This was back 2 percentage points on the week, falling below trade expectations. This move continues the trend of diminishing crop conditions reported for the US since spring reporting began last month.

We must look back to harvest 2014 for the last time, at this point, the US reported a greater proportion of its winter wheat crop as poor-very poor, than good-excellent.

Monday’s crop report further compounded the tightening supply prospect. Last week’s USDA World Agricultural Supply and Demand Estimate (WASDE) report, forecast a tight outlook for next season. The downgrading of production prospects from Australia, Ukraine and Morocco more than outweighed increases estimated in Russia, Ukraine and the US. However, the latest crop progress report leads to increasing fears as to how much of the US forecast production uptick will be realised.

Source - https://ahdb.org.uk