US wheat futures extended their recovery today, based mostly on the lack of follow up rainfall projected across the Western Plains in the next two weeks, and as the major forecasting models are in better agreement this evening. And despite heavy rainfall in KS early this week, drought conditions there are unchanged, and the coverage of drought is the most expansive since 2013. The graphic below shows the % of land in KS covered by severe and/or exceptional drought as of this week. It’s still too early to write the crop off entirely, but our work does suggest drought conditions in mid-April are a solid indicator of yield potential.
World cash markets are little changed – neither rising nor falling – and there is still some concern over Russian logistics and a bottleneck that’s developed since the middle part of February. Downside risk in the Black Sea is low, and thus US futures should find strong support below $4.50, May CME, and $4.65, May KC. Export sales on Friday will again be lackluster, but keep in mind spot KC has left an open chart gap at $4.98. No new sales advised.