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April 7, 2017
  • Wheat futures ended mixed this week. Larger than expected quarterly stocks of hard red spring (HRS) pressured MGEX lower. Strong export sales of hard red winter (HRW) supported KCBT, but beneficial rain across the United States capped gains and pressured CBOT wheat lower. CBOT May wheat slipped 2 cents lower to $4.24/bu, KCBT added a penny to $4.22/bu and MGEX fell 16 cents to $5.18/bu. CBOT May corn lost 5 cents to $3.59/bu and CBOT May soybeans dropped 4 cents to $9.42/bu.
  • With U.S. farmers preparing for spring planting, demand for barge and rail freight softened this week and pressured export basis. However, slow farmer selling also supported export basis since exporters must either buy from farmers who would rather be planting or buy hedged wheat from commercial interests. Export basis in October is supported by increased demand from corn and soybeans for rail and barge freight and export elevation.
  • USDA’s weekly Export Sales Report included net wheat sales of 568,400 metric tons (MT) for marketing year 2016/17. Sales were above trade expectations of 250,000 to 450,000 MT. Total known outstanding sales and accumulated exports of all classes of wheat for 2016/17, through March 30, 2017, were 26.8 million metric tons (MMT), 40% higher than a total of 19.2 MMT last year on this date, and 9% above the 5-year average. USDA expects 2016/17 U.S. wheat exports to reach 27.9 MMT.
  • On April 3, USDA rated 51% of the winter wheat crop in good to excellent condition, down from 58% good to excellent in their last crop condition report on Nov. 28. USDA reported 14% of winter wheat is in poor or very poor condition.
  • The April 6 U.S. Drought Monitor reported 2 to 5 inches (5 to 12 cm) of rain fell over Kansas, Oklahoma and Texas, improving soil conditions across the HRW-producing region. Still, 45% of Kansas and 66% of Oklahoma remain abnormally dry or in moderate drought. The 5-day forecast expects the U.S. Northern Plains to receive additional rain. Kansas, Oklahoma and Texas are expected to remain dry.
  • UkrAgroConsult forecast Ukrainian 2017/18 wheat production at 24.2 MMT. If realized, that would be down 7% from 2016/17.
  • According to Reuters, Ukrainian spring wheat planting is 70% complete, slightly ahead of last year’s pace.
  • The Baltic Index fell to 1215, down 8% from 1324 last week.
  • The Dollar Index increased to 101.20, up 1% from last Friday’s close of 100.42.
  • Current hard red spring (HRS) price indications are for Northern Spring. Dark Northern Spring is available, but premiums vary. SRW indications are for a minimum falling number of 250. Higher minimum specifications will carry a premium.

File Name
PR 170407.pdf
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