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January 13, 2017
  • Supported by strong export demand, KCBT and MGEX wheat futures climbed for the third consecutive week. The smallest winter wheat planted area since 1909 provided additional support to KCBT and lifted CBOT wheat futures higher. Since Dec. 2, CBOT wheat futures have rallied 10%, KCBT climbed 15% and MGEX increased 7%. CBOT March wheat futures rose 3 cents to $4.26/bu, KCBT added 15 cents to $4.49/bu and MGEX jumped 32 cents to $5.83/bu. CBOT March corn finished the week flat at $3.58/bu and CBOT January soybeans grew 56 cents to $10.42/bu.
  • Logistical issues supported export basis this week as exporters work to fill existing orders. Subzero temperatures and another snowstorm caused further delays for railroads across the U.S. Northern Plains all the way to the Gulf. Fog delayed Mississippi River barge traffic and slowed vessel loading in New Orleans. The Pacific Northwest received a foot of snow, which closed roads and delayed vessel loading. Due to delays in loading at the ports and the restricted movement of grain from the country to the export terminals, export capacity in January and February is scarce, further supporting export basis in those months. Soft white wheat export basis received additional support from the Columbia-Snake river system closure for planned maintenance that will run through March. 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 391,000 metric tons (MT) for marketing year 2016/17. Sales were within 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 Jan. 5, 2016, were 21.3 million metric tons (MMT), 33% higher than a total of 16.1 MMT last year on this date, and 9% above the 5-year average. USDA expects 2016/17 U.S. wheat exports to reach 26.5 MMT.
  • USDA forecast world wheat production at 753 MMT, up 2% from the 2015/16 record of 735 MMT. If realized, it would be 6% above the 5-year average, and the fourth consecutive year of record world wheat production. Global trade will reach 178 MMT, 11% above the 5-year average. Global consumption will set a new record for the fourth consecutive year at 740 MMT. U.S. production totaled 62.9 MMT, up 12% from 2015/16. USDA believes U.S. exports will reach 26.5 MMT, up 26% year over year and on par with the 5-year average.
  • USDA’s Winter Wheat Seeding report estimated U.S. farmers planted 32.4 million acres (13.1 million hectares) of winter wheat, the second smallest area on record. USDA assessed HRW planted area at 23.3 million acres (9.43 million hectares), down 12% from 2016. Total SRW planted area of 5.68 million acres (2.30 million hectares) fell 6% from 2016/17. White winter wheat planted area decreased to 3.37 million acres (1.36 million hectares), down 4% from 2016/17.
  • The Jan. 10 U.S. Drought Monitor reported below normal temperatures and minimal precipitation last week causing dry conditions to worsen in the U.S. Southern Plains. Reports from Oklahoma indicate 60% of farm ponds are dry, and that winter wheat crops are severely damaged in several counties. The 5-day forecast shows much-needed precipitation falling across the region.
  • On Jan. 12, Bolsa de Cereales, the Argentine Grain Exchange, reported wheat harvest was 99% complete, up from 95% last week. The average yield to date is 3.40 metric tons per hectare (MT/ha) (50.6 bu/acre) compared to 3.02 MT/ha (44.9 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 dropped to 892, down 9% from 983 last week.
  • The Dollar Index fell to 101.28, down 1% from last week’s close of 102.17. Year-over-year, the U.S. dollar has weakened 48% against the Australian dollar, 22% against the Russian ruble and 8% against the Canadian dollar.
  • 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 170113.pdf
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