Market Morsel: Bye Bye America has a smaller wheat pie.

| 19th May 2022 | By Andrew Whitelaw

Market Morsel

Grain prices are really simple. Everyone thinks that markets are complex, or maybe some just like to continue that idea.

Markets are driven by supply and demand. Supply is generally the most focused factor in grains. If supply drops, then price rises (and vice versa).

One of the world’s major wheat exporters, the USA, is going through strife. We have been covering this off since March, and conditions are dropping.

The newest update shows that the US winter wheat crop is at 27% good/excellent, which is 2% down on the previous week and comes off the back of French downgrades (see here).

The likelihood of major upward revisions to the crop is getting lower and lower each week. A rating of 27% is the joint second for this time of the year (1996), with only 1989 having worse conditions.

This is a bullish or positive factor for grain pricing.

A selection of charts and maps are shown below for your viewing pleasure.

Tags

  • Wheat