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February 19, 2016
  • Short-covering and technical buying pushed wheat futures higher this week, however, slow export demand and an abundant global wheat supply continue to limit gains. Commodity funds hold large net short positions in wheat. Trade continues to monitor Russian export policies and Egypt import requirements. CBOT March wheat added 4 cents to $4.62/bu, KCBT climbed 13 cents week over week to $4.57/bu and MGEX grew 6 cents to close at $4.92/bu this week. CBOT March corn and soybeans each rose 5 cents to $3.65/bu and $8.78/bu, respectively.
  • Slow export demand pressured basis from all ports, however, the backlog of river traffic continues to support basis for nearby Gulf contracts. The planned Columbia-Snake River system maintenance closure in March lent limited support this week to nearby soft white (SW) basis, but dramatically increased farmer selling weakened SW basis for most protein specifications. SW low protein spreads continued to widen due to the limited supply of low protein SW available.
  • In its weekly Export Sales Report, USDA reported net sales of 253,600 metric tons (MT) for delivery in marketing year 2015/16. Sales were in line with trade expectations of 200,000 to 400,000 MT and 3% higher than the prior 4-week average, but down 4% from the previous week. Total known outstanding sales and accumulated exports of all wheat classes for marketing year 2015/16, through Feb. 11, 2016, were 17.3 million metric tons (MMT), 18% lower than last year's year-to-date total of 21.0 MMT.
  • The United States sold hard red spring (HRS) to Egypt for the first time since 2010 last week despite residual confusion about import requirements. In a letter sent to traders on Wednesday, Egypt’s Agriculture Minister stated it would allow 0.05% of ergot in imported wheat.
  • Warmer than average temperatures are expected across the southern U.S. plains this week that could cause winter wheat to break dormancy in that region.
  • France AgriMer this week estimated French wheat ending stocks will climb to a 17 year high of 6.0 MMT in 2015/16 due to reduced exports and domestic use.
  • Reuters reported Russia is again reviewing its export duty for wheat and may exempt some types of wheat.
  • Argentina declared flood emergencies in six of its grain producing provinces on Friday. Corn and soybeans in the affected provinces are forecast to receive another 3 to 5 inches in the next 10 days
  • The Baltic Panamax Index climbed 7% week over week to close at 313. This is the first time the index has closed higher week over week in 2016.
  • The Dollar Index rose to 96.65 up from 96.07 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.
  • The next “Price Report” will be issued on Monday, Feb. 29.

File Name
PR 160219.pdf
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