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September 16, 2016
  • CBOT December wheat finished the week flat at $4.03/bu, KCBT and MGEX dropped a penny each to $4.17/bu and $4.93/bu, respectively. CBOT December corn lost 4 cents to $3.37/bu and CBOT November soybeans fell 14 cents to $9.66/bu.
  • The US futures markets rose this week on continued optimism of brisk business. Marketing year to date, exports are 18% above last year’s pace and on-track to meet the USDA’s revised sales estimate of 25.9 MMT.
  • Any market gains were tempered this week by plentiful global supplies and ongoing concerns with Egypt, the world’s single largest wheat buyer. Some in the trade are beginning to speculate that the problem is not ergot but the availability of hard currency.
  • Brazil has been an active buyer and hopes are that the US can sell a few more cargoes before the Argentinian harvest begins.
  • Concerns over Canadian wheat quality have lent some strength to the US spring wheat market. Excessive rain in Canada has lifted yields, but will lower overall wheat quality. Some reports are that more than 50% of Canadian durum is expected to grade a number 4 or 5 CWAD, due to weather related damage. Many traders also expressed concern with making a vomitoxin specification for Canadian spring wheat to Europe (1.25 ppm).
  • Premiums for high protein spring wheat are seen in the basis levels as well as the current spread between Minneapolis and Kansas City contracts. Ongoing issues with low protein in the Canadian crop have only widened this spread in US markets.
  • It was a slow uneventful week in the Baltic Dry-Bulk market. Ocean freight remained at historically low levels due to the oversupply of vessels and relative weak demand. Most rates were adjusted down 25 cents per metric ton from the previous week.
  • Inland rail freight remains plentiful and reasonably priced for this time of year. The trade is, however, starting to price-in the Columbia Snake River Closure, starting in December 2016 and reopening in March of 2017. Buyers of Soft White will see some higher basis levels for the months of December, January, February, and March, but we should not experience any interruption in supplies, because there is sufficient rail capacity.
  • The Baltic Index rose to 800, 1% higher than last week’s close of 792.
  • The Dollar Index rose to 96.12, up 1% from 95.34 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.

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