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January 6, 2017
  • Since Dec. 23, CBOT and KCBT March wheat futures each rallied 7% and MGEX increased 4% supported by technical buying and continued strength in export demand. Concerns about U.S. Plains winter wheat condition also lent support to KCBT. The strengthening U.S. dollar continues to pressure the market. CBOT March wheat rose 30 cents since Dec. 23 to $4.23/bu, KCBT climbed 27 cents to $4.33/bu and MGEX added 19 cents to $5.50/bu. CBOT March corn gained 12 cents to $3.58/bu and CBOT January soybeans fell 3 cents to $9.86/bu.
  • Average snowfall accumulation in the Northern U.S. Plains is 2 to 3 feet (0.6 meters to 0.9 meters) with another 7 to 10 inches (18 to 25 cm) expected this weekend, making rail freight logistics challenging and supporting export basis levels for both ports. Strong export demand is supporting hard red spring (HRS) Gulf export basis and pushed PNW HRS export basis higher this week. The wheat futures rally and first of the year loan payments triggered increased farmer selling, which provided limited pressure to export basis. The Columbia Snake River system closure for planned maintenance began Dec. 16. The Great Lakes-St. Lawrence Seaway System closed for the season on Dec. 20 and will reopen at the end of March.
  • USDA’s weekly Export Sales Report included net wheat sales of 183,700 metric tons (MT) for marketing year 2016/17. Sales were below trade expectations of 200,000 to 500,000 MT, and a marketing year low. Total known outstanding sales and accumulated exports of all classes of wheat for 2016/17, through Dec. 29, 2016, were 20.9 million metric tons (MMT), 33% higher than a total of 15.8 MMT last year on this date, and 7% above the 5-year average. USDA expects 2016/17 U.S. wheat exports to reach 26.5 MMT.
  • The Jan. 3 U.S. Drought Monitor reported heavy rains fell across the southeastern United States bringing much needed relief to drought-stricken areas. However, in the last 90 days, eastern Colorado, western Kansas, Oklahoma and northern Texas have received less than half of the normal precipitation. Higher than average temperatures and wind are compounding the dry conditions. On Jan. 1, topsoil moisture rated short to very short rose to 70% in Oklahoma, up from 55% on Nov. 27 and just 1% short to very short in 2015.
  • In its monthly report for select states, USDA’s National Agricultural Statistics Service (NASS) reported winter wheat conditions declined across most of the major hard red winter (HRW) producing states. USDA rated 25% of the winter wheat in Oklahoma as good to excellent compared to 53% on Nov. 27. In Kansas, 44% of the winter wheat is rated good to excellent compared to 52% on Nov. 27. Winter conditions also deteriorated in Colorado, Montana and Nebraska. USDA will resume weekly crop condition reports in April.
  • On Jan. 5, Bolsa de Cereales, the Argentine Grain Exchange, reported wheat harvest was 95% complete, up from 85% last week. The average yield to date is 3.39 metric tons per hectare (MT/ha) (50.4 bu/acre) compared to 2.96 MT/ha (44.0 bu/acre) on the same date last year. Bolsa de Cereales expects Argentine farmers to produce 15.0 MMT of wheat, up 39% from 2015/16, if realized.
  • The Baltic Index rose to 983, up 2% from the Dec. 23 close of 961.
  • The Dollar Index fell to 102.17, down 1% from 103.01 on Dec. 23.
  • Current 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 170106.pdf
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