US wheat prices show record weekly decline since August

Wheat futures on the US Central Bank of America (CBOT) are posting their sharpest weekly decline since August. This is a result of easing concerns about drought in key regions of the country and growing hopes for a quick end to the war in Iran.

The most liquid July wheat futures are down 3.7% this week. This is the largest decline since early August, when they fell approximately 4%.

In recent weeks, US prices have risen amid poor rainfall in winter wheat production areas, as well as due to disruptions in fertilizer supplies caused by the near-complete closure of the Strait of Hormuz, notes Cornucopia Agri Analytics strategist Tobin Gorey.

Rains in the western and southern Great Plains are expected to “improve moisture conditions for winter wheat” over the next 6-10 days, according to a note from Vaisala Xweather.

Furthermore, according to Bloomberg, citing an anonymous source, the US and Iran have reached a preliminary agreement to extend the ceasefire for 60 days, although US President Donald Trump has not yet agreed to its terms.

“Nevertheless, the market remains uncertain,” writes Matt Ammermann, commodity risk manager at StoneX. “Markets want to see the Strait of Hormuz reopen, but the devil is in the details. For now, crude oil futures continue to trade as if the strait will reopen, which is an encouraging sign.”

Tags: prices, wheat