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September 1, 2017
  • Support from strong export demand and a softer U.S. dollar, which makes U.S. wheat exports more competitive against other origins pushed CBOT and KCBT wheat futures higher this week. Seasonal harvest pressure pulled MGEX lower. A smaller Canadian crop lent limited support. CBOT September wheat added 11 cents to $4.20/bu, KCBT climbed 8 cents to $4.12/bu, and MGEX lost 38 cents to $6.12/bu. CBOT September corn grew 1 cent to $3.40/bu and CBOT September soybeans gained 3 cents to $9.42/bu.
  • Storm delays in the Gulf and limited export elevation capacity in the Pacific Northwest (PNW) are supporting September nearby export basis. 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.
  • Gulf exporters believe normal operations could resume as early as next week for some ports. The U.S. Coast Guard reopened the ports of Galveston, Houston, Texas City, Brownsville and Freeport on August 31 with runtime and draft restrictions after Hurricane Harvey caused massive flooding and damage throughout the region. Corpus Christi remains closed to deep water vessels due to a vessel that broke loose during the storm blocking the harbor.
  • BNSF and Union Pacific railroads continue to clear tracks of debris and stage trains so that when power is returned to track signals operations can resume.
  • USDA’s weekly Export Sales Report included net wheat sales of 536,000 (MT) for marketing year 2017/18. Sales were within trade expectations of 300,000 to 600,000 MT. Total known outstanding sales and accumulated exports of all classes of wheat for 2017/18, through August 24, 2017, were 12.1 million metric tons (MMT), 2% ahead of last year’s total on this date, and on par with the 5-year average. USDA expects 2017/18 U.S. wheat exports to reach 26.5 MMT.
  • On August 28, USDA reported spring wheat harvest is 76% complete, ahead of the 5-year average of 66%.
  • The August 29 U.S. Drought Monitor reported Hurricane Harvey brought as much as 50 inches (127 cm) of rain to areas of Texas causing record-breaking floods. Ahead of fall planting, abnormally dry and moderate drought conditions expanded across Nebraska and Kansas due to 30-day rainfall deficits. Dry weather is allowing harvest to progress across the U.S. Northern Plains, but also caused drought conditions to worsen. Ninety percent of Montana, 66% of North Dakota and 70% of South Dakota are in a moderate to exceptional drought; the remainder of the three states are abnormally dry.
  • StatsCan estimated the 2017/18 Canadian wheat crop (excluding durum) at 21.6 MMT, down 10% from 2016/17 due to lower yields. Canadian durum wheat production is expected to fall 50% year over year to 3.90 MMT due to sharply lower planted area and lower yields.
  • The Saskatchewan weekly crop report reported hot, dry weather allowed harvest to progress across the province. Winter wheat harvest is 98% complete, up from last week’s 83% complete. Durum harvest is 32% complete up from 14% last week, and spring wheat harvest is 14% complete, up from 4% one week ago. In Alberta, 57% of spring wheat is rated in good to excellent condition down slightly from the prior week. Spring wheat harvest is 17% complete, up from 9% complete last week.
  • According to the German Agricultural Ministry, German farmers produced 24.5 MMT of wheat in 2017/18, up slightly from last year. However, the Ministry noted lower test weights and falling numbers in the areas where rain fell on mature wheat.
  • The Russian Ministry of Agriculture reported Russian wheat harvest is 62% complete. Russian farmers have harvested 67.1 MMT of wheat to date with an average yield of 57.7 bu/acre (3.88 MT/ha).
  • On August 31, Bolsa de Cereales, the Buenos Aires Grain Exchange, noted excessive moisture and flooding is threatening wheat development on 34% of the country’s planted wheat area. Bolsa estimates Argentine wheat planted area totaled 13.2 million acres (5.35 million hectares) for 2017/18.
  • The Baltic Index fell to 1184, down from the prior week’s close of 1209.
  • The Dollar Index decreased to 92.55 from last Friday’s close of 92.74.

File Name
PR 170901.pdf
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