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April 13, 2017
  • Wheat futures markets closed higher this week supported by short-covering and technical buying as the markets wait for a weather event to trigger more price movement. Beneficial rain across the United States limited gains. CBOT May wheat added 6 cents to $4.30/bu, KCBT gained 5 cents to $4.27/bu and MGEX grew 12 cents to $5.30/bu. CBOT May corn increased 11 cents to $3.71/bu and CBOT May soybeans rose 13 cents to $9.55/bu.
  • With the logistics challenges caused by the harsh winter now all but cleared up, increased export capacity in the Pacific Northwest (PNW) softened export basis this week. With most of Latin America on holiday before Easter, Gulf export basis also fell.
  • USDA’s weekly Export Sales Report included net wheat sales of 421,600 metric tons (MT) for marketing year 2016/17. Sales were within trade expectations of 250,000 to 450,000 MT. Total known outstanding sales and accumulated exports of all classes of wheat for 2016/17, through April 6, 2017, were 27.2 million metric tons (MMT), 41% higher than a total of 19.3 MMT last year on this date, and 10% above the 5-year average. USDA expects 2016/17 U.S. wheat exports to reach 27.9 MMT.
  • On April 10, USDA rated 53% of the winter wheat crop in good to excellent condition, up 2 percentage points from last week; 13% of winter wheat is in poor or very poor condition. USDA reported 9% of winter wheat had headed, compared to the 5-year average of 6%. Spring wheat planting is 5% complete, behind the 5-year average pace of 11% according to USDA data.
  • The April 13 U.S. Drought Monitor reported heavy rain fell across the United States. Soil moisture conditions improved across the hard red winter (HRW) growing region, yet 51% of Oklahoma is experiencing moderate to severe drought. The 5-day forecast expects more rain across the United States.
  • In its monthly World Agricultural Supply and Demand Estimates (WASDE), USDA forecast 2016/17 world wheat production at 751 MMT, up 2% from the 2015/16 record of 735 MMT. If realized, it would be 6% above the 5-year average, and the fourth consecutive year of record world wheat production. Global trade will reach 181 MMT, 13% above the 5-year average. Global consumption will set a record for the fourth consecutive year at 741 MMT. World ending stocks will climb to 252 MMT, up 4% year over year if realized. U.S. production totaled 62.9 MMT, up 12% from 2015/16.
  • According to Reuters, Ukrainian spring wheat planting is 76% complete, up from 70% complete last week.
  • Australian analyst group Profarmer expects Australian 2017/18 wheat planted area to total 33.1 million acres (13.4 million hectares), down just 1% from 2016/17 if realized. Australian farmers generally begin planting wheat in late April.
  • Stratégie Grains lowered its 2017/18 forecast for European Union wheat production to 144 MMT, down 100,000 MT from last month’s forecast, but still 6% above 2016/17 total production. The analyst group noted Spain and parts of France, Belgium, Hungary, Austria and Bulgaria have received below normal precipitation and will need rain soon to meet its current production forecast.
  • The Baltic Index rose to 1282, up 5% from 1215 last week.
  • The Dollar Index decreased to 100.54, down 1% from last Friday’s close of 101.20.
  • 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 170413.pdf
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