Fundamentally Speaking

Wheat futures have been on quite a tear pushing to the highest levels since last August on deteriorating crop prospects in the Black Sea region, especially in Russia along with questions about the EU and Australian crops.

Here in the U.S., though winter wheat conditions are the best in three years, large sections of Kansas, the nation's largest wheat producing state, remain gripped by severe drought conditions.

There is also talk that the U.S., where exports this year will come in at an over 50-year low, could see a resurgence in demand given the crop woes in other key exporting countries and regions.

Along these lines, this chart shows both the old crop and new crop wheat export sales in million bushels on the left-hand axis while plotted on the right-hand axis is each of those figures as a percent of the May USDA WASDE export projection given earlier this month as of the third week in May.

Starting with new crop, current sales for the marketing year beginning June are 120 million bushels (mb) which is 15.5% of the first USDA wheat export projection for the 2024/25 marketing year.

That is the second highest percent since the 2016/17 season, so we are off to a good start.

Certainly, it is better than the figure for this season (2023/24) whose percent last year as of the third week of May was 11.2%, the second lowest percent since the 2012/13 marketing year.

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