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Wheat Higher on Continued Drought Concerns

The grains are mixed this morning with the exception of wheat which continues to move higher on concerns of intensifying drought across the plains.

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In the overnight session the grains were mixed. Corn is trading up 1 1/2 cents, soybeans are unchanged and wheat is up 4 1/4 cents this morning on talks of extended Russian export taxes and expanding drought throughout the plains. At 2 PM CST the USDA will issue its first crop progress report which will provide a national winter wheat crop rating.

On Thursday April 2nd the latest drought monitor showed the plains has gotten drier, leaving nearly 36 percent of the plains in moderate to exceptional drought. Kansas wheat rated good to excellent has slipped 5 percent over the last month to 39 percent good to excellent. In the 6-10 day outlook the central and southern plains expected to continue receiving warmer than normal temperatures. With temperatures hitting 90 degrees in Texas, Oklahoma and Kansas this early there is a lot of concern for next year’s crop. Wheat is breaking dormancy right into a drought that is intensifying throughout the plains, causing traders to question short positions as uncertainty grows about next year’s wheat crop.

The wheat is also supported this morning by speculation that Russia may extend a tax on wheat exports beyond this marketing year that ends on July 1st. Wheat in Ukraine and Russia received widespread rain over the weekend, accumulating .25-1.5 inches of rain over the past four days leaving only 15 percent of Russian wheat lacking adequate moisture.

Ukraine farmers have now planted 1.6 million hectares this spring which is 69 percent of the expected plantings. Of the area planted 1.2 million hectares went to barley, 111,000 hectares went to spring wheat, 149,000 hectares went to oats and 141,000 hectares went to peas. Ukraine’s harvest is expected to decline this year to 53 million metric tons of grain.

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