The Good: The spring wheat September contract settled at a contract high today as drought concerns pushed the markets higher. The September futures were up 32 cents on the day to close at US$8.16 per bushel. The forecast for precipitation at the end of the next week was overwhelmed by concerns that the 30C to 35C temperatures in North Dakota this week were likely to cause some stress to the wheat crop. The forecast models continue to push moisture into the Northern Plains late next week. Traders decided that they would wait until Sunday night to evaluate the impact of the potential forecast for rain. The good news is that the current model run seems to favour more precipitation north of the U.S. border than earlier model runs.
The Bad: The expectation two weeks ago was that the Northern Plains drought would be solved by the rain event that was underway. Here we are two weeks later and the drought monitor is essentially unchanged from then with most of North Dakota in an exceptional or extremely drought. The rains did some good, but crop conditions did not improve for the spring wheat crop. This just increases the need for moisture next week across the region. Also take note that the white wheat areas of the Pacific Northwest also remain in a severe to extreme drought situation.
The Ugly: Temperatures cooled today in the western Prairies, but extreme southeastern areas of Saskatchewan and most of southern Manitoba were very hot. The really hot temperatures were south of the border with most of central and eastern North Dakota reaching near the 40C mark at 2:00 CDT. The heat is not good news for the recently emerged wheat, corn, soybean and canola crops in North Dakota. The same can be said for crops in the southern and eastern Prairies as well.