USW of FacebookUSW on TwitterUSW on YouTube
July 1, 2016
  • Seasonal harvest pressure and bearish USDA Acreage and Quarterly Stocks reports caused wheat futures markets to plummet. Week-over-week CBOT wheat dropped 8%, KCBT declined 6% and MGEX fell 5%. A strong Export Sales report provided limited support. CBOT July wheat fell 38 cents to $4.16/bu, KCBT and MGEX each dropped 28 cents to $3.94/bu and $4.89/bu, respectively. CBOT July corn also fell 8% week-over-week, declining 31 cents to $3.53/bu. CBOT July soybeans added 66 cents this week to close at $11.69/bu.
  • With the drop in futures markets and the large carry, which encourages storage of wheat, farmer selling ground to a halt providing support to basis. Also providing support are continued competition for elevation capacity from soybeans and corn and steady export demand. Protein premiums for HRW continue to rise on the expectation of a high-yielding, lower protein HRW crop. Basis levels for the Pacific Northwest are firmer for the last quarter of 2016 due to planned maintenance closures on the Columbia and Snake River system. Fourth quarter basis for the Gulf and Lakes also firmed due to increased competition for elevation and shuttle train capacity from corn and soybeans.
  • In its weekly Export Sales Report, USDA reported net sales of 645,300 metric tons (MT) for the 2016/17 marketing year. Sales were above trade expectations of 300,000 to 600,000 MT. Total known outstanding sales and accumulated exports of all classes of wheat for the 2016/17 marketing year, through June 23, 2016 were 7.64 million metric tons (MMT), 31 percent higher than last year's year-to-date total of 5.85 MMT. USDA expects 2016/17 U.S. wheat exports to reach 24.5 MMT.
  • As of June 27, U.S. winter wheat harvest is 45% complete, ahead of the 5-year average pace of 41% complete on the same date. USDA rated 62% of the U.S. winter wheat crop as good to excellent, up one percentage point from the prior week. USDA rated 72% of the spring wheat crop in good to excellent condition, down from 76% last week, and on par with conditions at this time last year. USDA reported 56% of spring wheat had headed, compared to the 5-year average of just 27% on the same date.
  • USDA reported U.S. farmers planted 50.8 million acres (20.6 million hectares) of wheat in 2016/17, up slightly from the March estimate of 49.6 million acres, but 9% lower than the 5-year average. USDA expects 2016/17 harvested area will also decline to 44.1 million acres (17.8 million hectares).
  • According to StatsCan, 2016/17 Canadian spring wheat planted area declined 9% year-over-year to 15.4 million acres (6.25 million hectares). Durum planted area increased to 6.10 million acres (2.47 million hectares), up 5% from 2015.
  • IGC raised its global wheat forecast to 729 MMT, up from its previous estimate of 722 MMT. IGC expects global wheat consumption to be on par with 2015 at 720 MMT.
  • Rain continued to fall in France and Germany this week, worsening already wet conditions. FranceAgriMer rated 65% of French soft wheat in good or excellent condition, down from 71% the prior week.
  • On June 26, the Panama Canal opened new expanded locks capable of accommodating neo-Panamax ship transits.
  • The Baltic Index rallied to 660, 11% higher than last week’s close of 596.
  • The Dollar Index climbed to 95.73, up slightly from 95.44 last Friday.
  • Current hard red spring (HRS) price indications are for Northern Spring. Dark Northern Spring is available, but premiums vary. Soft red winter (SRW) indications are for a minimum falling number of 250. Higher minimum specifications will carry a premium.

File Name
PR 160701.pdf
2008-2013 U.S. Wheat Associates. All Rights Reserved
CCBot/2.0 ( - Is Mobile: Privacy Policy | Non-Discrimination Statementfalse