Wheat markets have jumped after Texas was battered by Hurricane Patricia over the weekend, adding to concerns over bad weather conditions effecting crop establishment.
UK wheat futures reacted when trading reopened yesterday, rising £1.75/t for November 2015 to £115.25/t, while Chicago wheat prices jumped to £121.39/t for December 2016.
Wheat prices had been continuing their downward trend before the weekend, with UK feed wheat futures settling at £113.50/t for November 2015 and £116.45/t for January 2016 on Friday 23 October.
But Hurricane Patricia, the strongest storm ever experienced by the US, hit the western side of the country and Mexico on Friday and dumped 30cm of rain in parts of Texas.
This added to concerns about wheat establishment and late-maturing summer crops in the US Plains, where the US Drought Monitor said “significant short-term drought” continued to grip southern states.
In Colorado, winter wheat emergence lagged 12% behind the five-year average by 18 October.
James Bolesworth, trading adviser at CRM Argi-Commodities, said despite yesterday’s price improvement, he still expected to see a continuation of the downward trend in wheat prices, as long as bad weather conditions did not continue.
Wheat markets were being purely driven by weather risks on both sides of the Atlantic, he said, with Russia, Ukraine, the US and Brazil all experiencing dry conditions during this key crop establishment period.
All eyes were now on these key wheat-producing countries, he said.