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July 28, 2017
  • News of above average wheat yields in Russia and Ukraine pressured wheat futures lower this week. Routine export business and lower wheat yields across the U.S. Northern Plains lent limited support. CBOT September wheat fell 18 cents to $4.81/bu, KCBT dropped 15 cents to $4.81/bu and MGEX lost 37 cents to $7.40/bu. CBOT September corn declined 5 cents to $3.74/bu and CBOT August soybeans decreased 8 cents to $10.01/bu.
  • Export basis for hard red winter (HRW), hard red spring (HRS) and soft white (SW) softened for nearby months as customers wait for harvest and crop quality reports to dictate buying patterns. Export basis for October, November and December shipment are sharply higher than nearby contracts due to increased demand for freight during corn and soybean harvest.
  • USDA’s weekly Export Sales Report included net wheat sales of 498,000 (MT) for marketing year 2017/18. Sales were within trade expectations of 350,000 to 550,000 MT. Total known outstanding sales and accumulated exports of all classes of wheat for 2017/18, through July 20, 2017, were 9.92 million metric tons (MMT) up 2% from last year’s total of 9.76 MMT on this date, and slightly above the 5-year average. USDA expects 2017/18 U.S. wheat exports to reach 26.5 MMT.
  • On July 24, USDA reported winter wheat harvest is 84% complete, slightly ahead of the 5-year average pace of 80%. USDA rated 33% of the spring wheat crop in good to excellent condition compared to 34% last week; 40% of spring wheat is in poor or very poor condition. USDA reported 96% of spring wheat had headed, a slightly faster pace than the 5-year average of 94%.
  • The July 25 U.S. Drought Monitor reported 0.5 inches (1.3 cm) of rain fell across the U.S. Northern Plains; it did not alleviate drought conditions much, as it was accompanied by above average temperatures. Seventy-nine percent of North Dakota is in a moderate to exceptional drought. Similarly, 80% of South Dakota and 49% of Montana are in a moderate to exceptional drought.
  • The Wheat Quality Council estimated the 2017/18 hard red spring (HRS) yield at 38.1 bu/acre, down from last year’s estimate of 45.7 bu/acre and the lowest estimate since 2008. The estimate does not consider abandoned acres.
  • FranceAgriMer reported French wheat harvest is 85% complete, up from 63% the prior week and ahead of the 5-year average.
  • As of July 27, Bolsa de Cereales, the Buenos Aires Grain Exchange, reported Argentine farmers were 92% complete with wheat planting, up from 82% complete the prior week and ahead of last year’s pace. Bolsa estimates Argentine wheat planted area will total 13.3 million acres (5.4 million hectares).
  • The Saskatchewan weekly crop report noted hot weather and limited rainfall is expected to impact both yields and harvest date this year. Topsoil moisture conditions continue to vary widely across the province, with 5% of topsoil moisture rated as excessive and 60% rated as short or very short. In Alberta, 63% of spring wheat is rated in good to excellent condition compared to 66% last week. The Alberta government pegged 2017/18 spring wheat yields at 47.3 bu/acre, down from 53.3 bu/acre in 2016/17. Alberta durum yield is forecast at 39.1 bu/acre, down from 47.1 bu/acre one year ago.
  • Reuters reported Ukraine wheat harvest is 70% complete. As of July 28, Ukrainian farmers had harvested 17 MMT of wheat.
  • The Baltic Index fell to 942, down 3% from the prior week’s close of 977.
  • The Dollar Index slipped to 93.34, down slightly from last Friday’s close of 93.86.
  • Current hard red spring (HRS) price indications are for Northern Spring. Dark Northern Spring is available, but premiums vary. SRW indications are for a minimum falling number of 250. Higher minimum specifications will carry a premium.

File Name
PR 170728.pdf
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