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November 4, 2016
  • Wheat futures finished mixed this week. Slow export sales and abundant world supplies pressured KCBT and MGEX lower. Fund managers hold a large net short position in CBOT wheat, leaving it vulnerable to short-covering rallies. A weaker U.S. dollar lent limited support. CBOT December wheat added 6 cents to $4.14/bu, KCBT finished the week flat at $4.11/bu and MGEX dropped 15 cents to $5.10/bu. CBOT December corn lost 6 cents to $3.49/bu and CBOT November soybeans fell 20 cents to $9.81/bu.
  • Durum prices strengthened this week after sales to Algeria provided definition to the market. November and December basis remain firm due to slow farmer selling and limited availability of export elevations. Corn and soybeans continue to tie up both freight and elevation capacity with many export terminals booked through the end of 2016. Beginning in January, lower rail freight pressures basis, but slow farmer selling and strong export demand limit downside potential.
  • USDA’s weekly Export Sales Report included net wheat sales of 234,900 metric tons (MT) for marketing year 2016/17. Sales were below trade expectations of 400,000 to 600,000 MT. Total known outstanding sales and accumulated exports of all classes of wheat for 2016/17, through Oct. 27, 2016, were 16.3 million metric tons (MMT), 27% higher than a total of 12.8 MMT last year on this date. USDA expects 2016/17 U.S. wheat exports to reach 26.5 MMT.
  • As of Oct. 23, U.S. winter wheat planting is 86% complete, up 7% from the prior week, and 70% of the crop had emerged compared to 60% last week. USDA rated 58% of the winter wheat crop in good to excellent condition, down one percentage point from last week, but up from 49% the prior year.
  • CBH Group expects frost damage to cut grain production in the state by 15%. Western Australia is the largest wheat producing state in Australia with wheat accounting for an average 60% of the state’s total grain production.
  • Bolsa de Cereales, the Argentine Grain Exchange, reported harvest is 5% complete as of Nov. 3, up from 3% last week. Bolsa de Cereales rated 49% of the crop in good condition, 33% normal, 16% very good and just 2% in excellent condition.
  • According to Reuters, Egypt allowed the Egyptian pound to float on Nov. 3, devaluing it by 32%. Egypt is the world’s largest wheat importer, and the currency devaluation will make wheat imports more expensive for Egyptian wheat buyers.
  • U.S. Wheat Associates published its annual Crop Quality report last week. To read it, click here*
  • The Baltic Index rose to 849, 6% higher than last week’s close of 798.
  • The Dollar Index fell to 97.05, down 2% from 98.68 last Friday.
  • Current hard red spring (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.

File Name
PR 161104.pdf
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