FX.co ★ Wheat Falls Further from 2-Month High

Wheat futures have dipped below $5.37 per bushel, receding from the two-month peak of $5.55 recorded on June 6, as enhanced US crop conditions alleviate supply worries. The winter wheat crop, once deemed the second-worst on record last autumn, now boasts a 54% good-to-excellent rating—the most favorable early-June assessment since 2019. This significant recovery, attributed to beneficial weather, underpins robust US export potential, which has already reached a 12-year high for this phase of the marketing year. Notably, hard red winter wheat exports are at a 17-year peak. Despite this, harvesting is progressing sluggishly, with only 4% completed due to substantial rainfall in crucial states like Oklahoma and Kansas. Ongoing wet weather could further delay harvests and impact grain quality. Concurrently, US spring wheat conditions are on the upswing, now rated 53% good-to-excellent, marking a significant improvement from a poor start. While plantings remain historically low, favorable conditions might aid in boosting production. The USDA might slightly increase its harvest forecast, which is already near a nine-year high.