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August 26, 2016
  • Technical sales, a stronger U.S. dollar and large global supply pressured wheat futures lower this week. Concerns over milling quality supply lent limited support. CBOT wheat futures fell 10% week over week, and closed at a 10-year low. KCBT wheat dropped 7% on the week and MGEX declined 6%. CBOT September wheat futures decreased 43 cents this week to $3.83/bu, KCBT closed 29 cents lower at $3.90/bu and MGEX lost 30 cents to $4.98/bu. CBOT September corn shrank 18 cents and CBOT September soybeans fell 36 cents to $9.91/bu.
  • Corn and soybean export demand for rail freight and elevation capacity continues to support export basis at all ports. Rail rates will increase in October, accounting for part of the basis increase. Lack of farmer selling and strong export demand for wheat also supported basis. Closed Italian markets limited export demand and pressured prices lower week over week.
  • USDA’s weekly Export Sales Report included net wheat sales of 379,700 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 Aug. 18, 2016, were 11.6 million metric tons (MMT), 18% higher than a total of 9.79 MMT last year on this date. USDA expects 2016/17 U.S. wheat exports to reach 25.9 MMT.
  • As of Aug. 22, U.S. spring wheat harvest is 65% complete, compared to the 5-year average of 46%.
  • On Aug. 25, the International Grains Council increased its estimate of 2016/17 global wheat production to 743 MMT, up 1% from the 2015/16 production, if realized. Global consumption will grow to a record 732 MMT, up 10.0MMT from 2015/16.
  • The European crop monitoring service (MARS) lowered its yield forecast for European Union soft wheat 4% to 5.86 metric tons per hectare (MT/ha) (87.2 bu/acre). MARS also lowered French wheat yields to 6.56 MT/ha (97.6 bu/acre), 11% below the 5-year average.
  • On Aug. 23, StatsCan pegged 2016/17 Canadian all wheat production at 30.5 MMT, up 10% from 2015/16 due to a 14% increase in expected yields. Average Canadian wheat yields are forecast at 3.29 MT/ha (48.9 bu/acre) and will offset a 3% decline in harvested area, which fell to 9.27 million hectares (22.9 million acres).
  • Argentina’s Bolsa de Cereales de Buenos Aires (Buenos Aires Grain Exchange) reported Argentine farmers planted 4.3 million hectares (10.6 million acres) of wheat for 2016/17, up 19% from 2015/16. As of Aug. 25, 3% of Argentine wheat is headed.
  • The Baltic Index rose to 718, 5% higher than last week’s close of 682.
  • The Dollar Index increased to 95.43, up 1% from 94.53 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 160819.pdf
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