It would appear that I spoke to soon the other week when I commented how unusual it was to see no sign of any weather issues across the Northern Hemisphere as snowfall arrives in the American Midwest.
High winds and up to 12 inches of snow has fallen across four Midwest states over the bank holiday weekend, with severe issues reported in the key wheat growing state of Kansas.
Almost all wheat affected was well developed and some areas affected were at the early stages of forming grain.
Although it will take several days for the snow to melt and the subsequent damage to be assessed, trade rumours are suggesting that the losses could be extremely substantial.
Whilst the UK markets were closed for the first May Bank Holiday on Monday, the US wheat market closed almost 6% higher on Monday evening.
On Tuesday, as the UK market began to pay catch up, both old and new crop wheat futures opened £2/T higher.
Physical buyers appear to be more concerned with the new crop wheat market and £140/T ex-farm is now again being offered for pre-Christmas collection.
Farm sellers have however appeared reluctant to commit at these levels over the past couple of days despite targeting the offered values.
For those of you looking to make a sell, I would keep a close eye on the new crop wheat futures this next week – “weather markets” can often drop as quickly as they rise.
Elsewhere, below average rainfall in areas of Western Europe has led to increasing concern over winter crops.
While general winter crop health is said to be positive, long term forecasts are dry.
According to AHDB, “the warmer conditions experienced so far this season have helped to drive earlier crop development in Spain, France and Italy and although the crops look well, the earlier development has left the crops susceptible to stress.
“We will need to see these ideal growing conditions persist into the early summer months or we could see issues arise” – hence the concern over the dry forecast ahead.
Although the above is entirely speculative at this stage in the season, European futures appear to be reacting to the concerns.
The markets will continue to watch the European weather development with a keen eye following the impact of extreme weather on the French and German crop last year.