A deluge of weather issues plagued Kansas wheat areas over the weekend. Consequently, a three pronged threat (that Jim gave a heads up to his clients on) may lead to a decrease in crop quality. The major short position in the market means a lot of investors are taking a hit with today’s rally.
Snowfall
For the western half of Kansas, up to a foot of snow fell. Due to warmer temperatures, it was heavy wet snow that fell, rather than fluffy powder. This is important because wind and snow can knock heads off the plant, limiting its yield.
SOURCE:NOAA
Late Spring Shiver for Wheat
Wheat can survive freezing temperatures during the winter, while the crop is dormant. However, the crop came out of dormancy early this year because of the warm temperatures in March and April. In Kansas, 25% of the crop currently headed. This portion is most vulnerable to freeze damage, with injury typically occurring at 30F. Less developed wheat is more resilient to cold conditions, with damage occurring at 15F-25F. Check out this informative graphic from Kansas State University regarding temperatures and potential injury.
SOURCE: Kansas State University
Flooding
For those that were spared snow and cold, their consolation prize was abnormally heavy rainfall. Rainfall totals ranged 1″ to +4″ in eastern Kansas and Missouri. Flooded soils can deplete the developing plant of oxygen. However, wheat usually can survive one or two days of flooding. Severe storms, included several tornados, tore through the midwest and South. See the video below:
SOURCE:AP
Jim’s comment and market view of this unique weather impact on futures prices is only provided to subscribers and private clients.
