The wheat market isn’t only driven what occurs in wheat. There are influences on wheat from other commodities outwith agriculture and and within. In this article I want to take a quick look at corn.
Corn and wheat have similar usages, and therefore they tend to trade in similar trends and patterns. If corn has a supply shock, we tend to see wheat rise. The first below shows the monthly average price for wheat and corn since 2000, and shows those trends.
If the US has a corn disaster, then our prices will rise.
The USDA release a weekly crop condition report. We look at the percentage of the crop which is determined as good/excellent. The current US condition is 64% good/excellent, which is slightly below the average since 2010.
The conditions have been stable for the past three weeks, providing some comfort to buyers. There is still time to go on the US corn development. Let’s see if it continues to perform, but we could do with some of that hot British weather drifting over.
The map below the change in condition on a state by state basis since last year.