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July 29, 2016
  • A strong export sales report lent limited support to the market this week. However, abundant global supplies continue to weigh on the hard red winter (HRW) and soft red winter (SRW) markets, which ended the week lower. MGEX received support from smaller than expected yields found by this year’s U.S. Hard Red Spring and Durum wheat tour participants. CBOT September wheat dropped 17 cents to $4.08/bu, KCBT fell 9 cents to $4.10/bu and MGEX added 2 cents to $4.88/bu. CBOT September corn finished the week flat at $3.34/bu and CBOT September soybeans added 21 cents to close at $10.20/bu.
  • Harvest pressured hard red spring (HRS) basis lower this week with cutting underway in South Dakota and parts of North Dakota. Farmer storage of wheat and elevation, barge and rail freight competition from corn and soybeans supported basis across the United States. 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 remains strong because corn and soybeans are competing for elevation and shuttle train capacity.
  • USDA’s weekly Export Sales Report included net wheat sales of 506,100 metric tons (MT) for marketing year 2016/17. Sales were in line with trade expectations of 400,000 to 600,000 MT. Total known outstanding sales and accumulated exports of all classes of wheat for 2016/17, through July 21, 2016, were 9.76 million metric tons (MMT), 27% higher than a total of 7.68 MMT last year on this date. USDA expects 2016/17 U.S. wheat exports to reach 25.2 MMT.
  • As of July 24, U.S. winter wheat harvest is 83% complete, just ahead of the 5-year average pace of 79% complete on the same date. USDA rated 68% of the spring wheat crop in good to excellent condition, down one percentage point from last week.
  • The Wheat Quality Council’s annual Hard Red Spring and Durum Quality Tour scouts estimated a final average yield potential of 45.5 bu/acre, down from the tour’s estimate of 49.9 bu/acre in 2015. Final tour estimates were calculated based on 455 stops over the past three days, and the individual class estimates were an average yield potential of 45.7 bu/acre for HRS, 45.4 bu/acre for durum and 34.7 bu/acre for HRW.
  • FranceAgriMer estimated French harvest at 41% complete compared to 68% on the same date last year, and rated 40% of French soft wheat in good or excellent condition, down from 42% the prior week.
  • The International Grains Council estimates 2016/17 global wheat production will reach 735 MMT, on par with 2015/16 production, if realized. Global consumption will grow to a record 727 MMT, up 1% from 2015/16 due to increased wheat feeding.
  • The Baltic Index dropped to 656, 10% lower than last week’s close of 726.
  • The Dollar Index fell to 95.53, down 2% from 97.45 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 160729.pdf
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