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May 12, 2017
  • Wheat futures closed lower this week due to better than expected crop condition ratings for winter wheat and good spring wheat planting progress. A stronger U.S. dollar lent additional pressure. CBOT July wheat futures fell 9 cents to $4.33/bu, KCBT lost 11 cents to $4.39/bu and MGEX declined 8 cents to $5.46/bu. CBOT July corn finished the week flat at $3.71/bu and CBOT July soybeans dropped 11 cents to $9.63/bu.
  • Export basis softened as traders reporting a quiet, almost “holiday-like” week. Farmers and customers are waiting for more information on the 2017/18 crop. Improving conditions on the Mississippi River also pressured Gulf export basis lower.
  • USDA’s weekly Export Sales Report included net reductions of 24,200 metric tons (MT) for marketing year 2016/17. Sales were well below trade expectations of 100,000 to 300,000 MT. Significant quantities were switched from Unknown destinations. Total known outstanding sales and accumulated exports of all classes of wheat for 2016/17, through May 4, 2017, were 27.9 million metric tons (MMT), 37% higher than a total of 20.4 MMT last year on this date, and 8% above the 5-year average. For 2017/18, net sales of 273,400 MT were reported. Sales for were within trade expectations of 150,000 to 300,000 MT.
  • On May 8, USDA rated 53% of the winter wheat crop in good to excellent condition, down slightly from last week; 15% of winter wheat is in poor or very poor condition, up 2 percentage points from the prior week. USDA reported 50% of winter wheat had headed, compared to the 5-year average of 46%. Spring wheat planting is 54% complete, up from 31% last week but behind the 5-year average pace of 60% according to USDA data. Spring wheat emergence is 21% complete, compared to the 5-year average of 29%.
  • The May 11 U.S. Drought Monitor reported heavy rains continued across the U.S. Plains with amounts of 1 to 3 inches (2.5 to 7.5 cm) recorded, causing flooding in some areas. The rain fell on maturing wheat that had not yet recovered from the previous week’s snowstorm, the damage from which is still being assessed. In contrast, the Northern Plains continued to be dry this week, allowing spring wheat planting to progress rapidly.
  • In its first supply and demand estimates report for marketing year 2017/18, USDA forecasted beginning stocks to increase to 255 MMT. That is up 5% year over year. World wheat production is expected to decline 2% to an estimated 738 MMT. Global trade will slip to 178 MMT, down from an estimated 180 MMT in 2016/17. Global consumption will decrease slightly in 2017/18 to 735 MMT, down slightly from the record 740 MMT in 2016/17. U.S. production will fall to an estimated 49.5 MMT, down 21% year over year, if realized. U.S. beginning stocks will climb to a projected 31.5 MMT, up 19% from 2016/17 and the largest beginning stocks since 1988/89, if realized. USDA believes U.S. exports will decrease slightly to 27.2 MMT, down 3% from the current 2016/17 forecast of 28.2 MMT.
  • According to Reuters, Ukrainian spring wheat planting is 95% complete, up 1 percentage point from the prior week at 415,000 acres (168,000 hectares).
  • FranceAgriMer rated 76% of French common wheat in good or excellent condition, up slightly from 75% the prior week after much needed rain fell in some areas this week. Rain and hot weather are forecast for the coming week.
  • Spring planting is underway in Canada. According to the Saskatchewan weekly crop report, spring planting is 11% complete in the Canadian province, up from 1% complete last week, but behind the 5-year average pace of 16%. Spring wheat planting in Alberta is 14% complete, up from 6% complete last week. Roughly 820,000 acres (332,000 hectares) of overwintered crops still need to be harvested in the province according to the Alberta weekly crop report.
  • The Baltic Index increased to 1012, up 1% from 1004 last week.
  • The Dollar Index climbed to 99.26, up 1% from last Friday’s close of 98.68.
  • 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.

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PR 170512.pdf
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