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April 22, 2016
  • Wheat futures closed higher this week after a short-covering rally pushed all three wheat futures higher with CBOT wheat reaching a 5-month high. Profit-taking and bearish fundamentals pared gains on Thursday and Friday. Beneficial rain fell on dry winter wheat growing areas providing additional pressure. CBOT May wheat added 7 cents to $4.67/bu, KCBT rose 4 cents to $4.62/bu and MGEX climbed 3 cents to $5.25/bu. CBOT May corn fell 7 cents to $3.72/bu and CBOT May soybeans jumped 31 cents to $9.87/bu.
  • Farmer selling increased dramatically this week due to the futures rally, which pressured basis. Soft white and Western White basis, in particular, softened with trade reporting large farmer sales.
  • In its weekly Export Sales Report, USDA reported net sales of 295,100 metric tons (MT) for delivery in marketing year 2015/16, up noticeably from the previous week, and 57% higher than the prior 4-week average. Sales were within trade expectations of 0 to 300,000 MT. Total known outstanding sales and accumulated exports of all wheat classes for marketing year 2015/16, through April 14, 2016, were 19.6 million metric tons (MMT), 17% lower than last year's year-to-date total of 23.7 MMT.
  • USDA rated 57% of the U.S. winter wheat crop as good to excellent as of April 18, up from 56% last week. USDA rated just 9% of the crop as poor or very poor, unchanged from the prior week and down from 19% last year. USDA reported spring wheat planting at 27% complete compared to the 5-year average of 19%.
  • According to a farmer survey done by StatsCan, Canadian farmers will plant 23.8 million acres of wheat in 2016, down 1% from 2015. Spring wheat area is expected to fall by 6% to 16.0 million acres. Partially offsetting the decline, is a 5% increase in durum area, which is expected to total 6.12 million acres. Last fall, Canadian farmers planted 1.68 million acres of winter wheat, up 32% year over year.
  • Russian consultancy Sovecon raised its estimate for 2016/17 Russian wheat production to 59.0 MMT, up from its previous forecast of 57.0 MMT due to favorable weather.
  • Russian and Bangladeshi officials will jointly retest two cargoes of Russian wheat that were rejected by Bangladesh for not meeting contract specifications earlier this week, according to Reuters.
  • The Chicago Board of Trade (CBOT) resets daily limits for grains and oilseeds in May and November each year. Daily limits for CBOT SRW and KCBT HRW remain at 35 cents.
  • The Baltic Index climbed to 670, up 12% from last week’s close of 597. Since hitting the record low of 290 on Feb. 11, the Index has rebounded 380 points.
  • The Dollar Index rose to 95.18, up slightly from 94.62 last Friday.
  • 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.

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