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June 30, 2017
  • News that U.S. and Canadian farmers planted less spring wheat than expected, with crop condition deteriorating, lifted MGEX wheat futures to the highest level in 3 years this week. KCBT and CBOT followed MGEX higher, supported by strong export sales and a weaker U.S. dollar. CBOT July wheat added 51 cents to $5.11/bu, KCBT grew 47 cents to $5.11/bu and MGEX jumped 80 cents to $7.41/bu. CBOT July corn added 13 cents to $3.70/bu and CBOT July soybeans increased 38 cents to $9.42/bu.
  • The carries in the wheat futures markets are encouraging higher levels of soft red winter (SRW) and hard red winter (HRW) wheat storage, which is supporting export basis for those classes as exporters have to outbid the calendar spreads. Discounts for low protein spring wheat shriveled up this week, much like the spring wheat crop in parts of MT and ND, as trade expects the worsening drought conditions to result in a smaller, higher protein crop.
  • USDA’s weekly Export Sales Report included net wheat sales of 492,100 (MT) for marketing year 2017/18, near the higher end of trade expectations. Total known outstanding sales and accumulated exports of all classes of wheat for 2017/18, through June 22, 2017, were 8.02 million metric tons (MMT), 5% higher than a total of 7.63 MMT last year on this date, and 7% above the 5-year average. USDA expects 2017/18 U.S. wheat exports to reach 27.2 MMT.
  • USDA reported U.S. farmers planted a record low 45.7 million acres (18.5 million hectares) of wheat in 2017/18, down 400,000 acres from the March estimate of 46.1 million acres, and 17% lower than the 5-year average. Spring wheat acres fell to a 45-year low of 10.3 million acres. USDA expects 2017/18 harvested area will also decline to 38.1 million acres (15.4 million hectares)
  • On June 26, USDA rated 49% of the winter wheat crop in good to excellent condition unchanged from last week; 16% of winter wheat is in poor or very poor condition. Winter wheat harvest is 41% complete, ahead of the 5-year average pace of 39%. USDA rated 40% of the spring wheat crop in good to excellent condition compared to 41% last week; 28% of spring wheat is in poor or very poor condition. USDA reported 36% of spring wheat had headed, slightly ahead the 5-year average of 35%.
  • The June 27 U.S. Drought Monitor reported hot, dry conditions throughout the U.S. Northern Plains worsened existing drought conditions. Forty-seven percent of North Dakota is in a severe or extreme drought and the remainder of the state is abnormally dry or in a moderate drought. Similarly, 57% of South Dakota and 42% of Montana are in a moderate to extreme drought. Soft red winter (SRW) and HRW growing regions experienced a few storms, some of which had damaging hail. Nonetheless, harvest progressed with minimal delays. The 5-day forecast expects less than 0.5 inches (1.27 cm) of rain to fall across the U.S. Northern Plains.
  • According to StatsCan, Canadian farmers planted 15.8 million acres of spring wheat for 2017/18, up an estimated 2% year over year, but 900,000 acres less than the prior estimate.
  • FranceAgriMer rated 65% of French common wheat in good or excellent condition, down from 68% the prior week due to hot, dry conditions. Wheat harvest is 4% complete.
  • As of June 29, Bolsa de Cereales, the Buenos Aires Grain Exchange, reported Argentine farmers were 65% complete with wheat planting, up from 53% complete the prior week and 7% ahead of last year’s pace. Wet field conditions are causing planting delays in Buenos Aires and La Pampa, two large wheat producing regions.
  • The Saskatchewan weekly crop report rated 65% of winter wheat, 49% of durum and 70% of spring wheat in good to excellent condition. On the same date last year, 96% of winter wheat, 95% of durum and 91% of spring wheat was rated in good to excellent condition. Topsoil moisture conditions continue to vary across the province, with 6% of topsoil moisture rated as excessive and 33% rated as short or very short. In Alberta, 80% of spring wheat is rated in good to excellent condition compared to 84% last week. Surface soil moisture is rated 67% good to excellent, down from 79% last week; 14% is rated excessive.
  • The International Grains Council (IGC) lowered its forecast for 2017/18 world wheat production by 800,000 MT from its previous forecast to 735 MMT. Reductions for Australian, the European Union (EU) and the United States were partially offset by an expected increase in Russia. If realized, it would be the first year over year drop in production in 5 years, and 3% below 2016/17.
  • The European Commission lowered its forecast for 2017/18 EU wheat production to 139 MMT, down from its previous estimate of 141 MMT due to hot, dry conditions.
  • The Baltic Index climbed to 920, up 6% week over week.
  • The Dollar Index fell to 95.72, down 1% from last Friday and the lowest point since last November.
  • 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.

File Name
PR 170630.pdf
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