This week’s drought monitor shows expanding drought despite spotty showers. Extreme drought expanded in central/western OK, eastern CO, and western KS. Agricultural drought is expanding in key spring wheat areas of MT, western ND, and pockets of SD.
Intermarket spreads are on the move this week as Minneapolis spring wheat futures gain additional premium on the Chicago and Kansas City winter wheat contracts. The winter wheat contracts are facing seasonal harvest pressure and are more closely tied to world wheat prices which have been on the defensive this week. Spring wheat is well supported in fund short-covering as the market prices in risk premium amid expanding dryness in the western growing regions.