Wheat spiked Thursday to the highest level seen in nearly a year as the drought centered in Oklahoma continued to worsen while dry conditions in Canada, Russia, and Australia added to concerns about world supplies. Kansas and Oklahoma winter wheat crop condition ratings are among the worst in history.
On the demand side of the equation, exports remained strong this week with Algeria and Japan buying U.S. wheat while Agriculture Secretary Perdue announced that a U.S delegation will head to China next week.
The Chinese trip is raising optimism for potential of increased agricultural exports to that country which has been a massive buyer of our crops. China purchased nearly $14 billion of U.S. soybeans last year (over one third of U.S production) and continues to be a main importer of hogs and cotton. Though wheat is not a major export to China, the rising tide of corn and bean prices tends to pull wheat upward as well.
As of Friday morning, July Chicago wheat, used in desserts and crackers, was trading at $5.36 per bushel while Kansas City wheat, used in breads and rolls, brought $5.56 per bushel.