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August 25, 2017
  • Technical selling and increasing estimates for Black Sea wheat production pressured wheat futures lower this week. A softer U.S. dollar lent limited support. CBOT September wheat dropped 6 cents to $4.09/bu, KCBT lost 10 cents to $4.04/bu, and MGEX declined 18 cents to $6.50/bu. CBOT September corn fell 13 cents to $3.39/bu and CBOT September soybeans added 1 cent to $9.39/bu.
  • Limited export elevation capacity in September supported nearby export basis across the United States. Export basis for October, November and December shipments is sharply higher than nearby contracts due to increased demand for freight during corn and soybean harvest. Hurricane Harvey may impact Gulf export logistics over the next week.
  • USDA’s weekly Export Sales Report included net wheat sales of 386,400 metric tons (MT) for marketing year 2017/18. Sales were within trade expectations of 300,000 to 600,000 MT. Total known outstanding sales and accumulated exports of all classes of wheat for 2017/18, through August 17, 2017, were 11.5 million metric tons (MMT) slightly behind last year’s total on this date, and 2% behind the 5-year average. USDA expects 2017/18 U.S. wheat exports to reach 26.5 MMT.
  • On August 21, USDA reported winter wheat harvest is complete. USDA rated 35% of the spring wheat crop in good to excellent condition compared to 33% last week, while 42% of spring wheat is in poor or very poor condition. USDA reported spring wheat harvest is 58% complete, ahead of the 5-year average of 51%.
  • The August 17 U.S. Drought Monitor reported scattered showers continued to replenish soil moisture reserves in the U.S. Southern Plains, which will begin planting winter wheat in a few weeks. A lack of rain across the U.S. Northern Plains allowed harvest to progress rapidly, but also expanded drought conditions. Hot, dry weather across the Pacific Northwest (PNW) benefited winter wheat harvest, but expanded abnormally dry conditions to most of the wheat-producing region. Hurricane Harvey, currently a category 3 hurricane, is expected to hit the Gulf Coast this weekend, bringing torrential rain and flash flooding.
  • The Saskatchewan weekly crop report reported winter wheat harvest is 83% complete, up from last week’s 50%. Durum harvest is 14% complete up from 3% last week, and spring wheat harvest is 4% complete. In Alberta, 57% of spring wheat is rated in good to excellent condition down slightly from the prior week. Spring wheat harvest is 9% complete and durum harvest is 27% complete.
  • FranceAgriMer estimated the French wheat crop increased to 36.8 MMT, up 33% from last year’s disastrous crop.
  • According to Reuters, Germany will produce 23.4 MMT of wheat in 2017/18, 3% less than 2016/17 due to excessive summer rain, which damaged both yield and quality.
  • The International Grains Council (IGC) increased its forecast for 2017/18 world wheat production by 10 MMT from its previous forecast to 742 MMT. Large increases in Black Sea wheat production drove the sharp increase. If realized, it would still be the first year over year drop in production in 5 years, and 2% below 2016/17.
  • On August 24, Bolsa de Cereales, the Buenos Aires Grain Exchange, noted excessive moisture and flooding is damaging later planted fields. Bolsa estimates Argentine wheat planted area will total 13.2 million acres (5.35 million hectares) for 2017/18.
  • The Baltic Index fell to 1200, down from the prior week’s close of 1260.
  • The Dollar Index decreased to 93.17 from last Friday’s close of 93.43.

File Name
PR 170825.pdf
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