KC futures led the way down as rainfall in the last 24 hours exceeded prior expectation (both quantity/coverage) and as the US market is still priced at a premium to competing supplies in Europe & the Black Sea. However, ARC does note that crop ratings as of Sunday are the lowest on record for mid-March, and our work suggests that a more significant pattern change is needed to meaningfully alter US yield potential. GD/EX in KS is pegged at 11%, vs. 12% last week and 38% a year ago. Ratings in OK & TX also fell on the week. Low yields are feared.
Russian fob wheat offers are slightly lower, but at $210/MT for May delivery are just $8/MT below comparable US origin (vs. $42 two weeks ago). US Gulf fob wheat is at much more aligned with world markets, and the US competes with Black Sea origin below $4.50.
Some downside remains, but we caution against turning bearish following the emotional $.75/Bu collapse. We remain concerned about an expanding Plains drought
