The U.S. Drought Monitor isn’t getting much attention from traders, but that could change. “We’re looking at an expanded drought area for the high plains. It increased a few percentage points compared to last week and got into a deeper stage of drought in southwest Kansas,” said Mike Zuzolo, president, Global Commodity Analytics and Consulting. Traders have been focusing on the good to excellent wheat crop ratings rather than on the poor to very poor ratings for the Kansas crop. “I always look at very poor to poor conditions, especially when there are drought scenarios that could develop. We see poor to very poor conditions didn’t increase. Instead, it sat at 14 percent compared to eight percent one year ago,” explained Zuzolo. “With that and the private Oklahoma wheat crop tour at 93.5 million bushels versus 110 million bushels last year, I think the trade really got it wrong going after a one percentage point increase in good to excellent conditions.”
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