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December 11, 2015
  • Wheat futures closed mixed this week with CBOT and KCBT futures contracts posting modest gains after the U.S. dollar fell 1% mid-week, triggering a small rally based on technical buying and short-covering. Slow export demand, highlighted by lower than expected export sales, limited the rally. Leading into the final trading day next Monday, the MGEX December contract closed down 30 cents, closing out six of the only eight contracts that still remained open. CBOT December wheat added 11 cents on the week to close at $4.83/bu. KCBT December wheat grew 5 cents to $4.68/bu and MGEX December wheat fell to $4.98/bu. CBOT December corn lost 3 cents to $3.73/bu and CBOT January soybeans dropped 35 cents to $8.71/bu.
  • Increased farmer selling and sluggish export demand softened basis in the Gulf. PNW basis also eased due to increased competition among firms for the limited number of export sales.
  • In its weekly Export Sales Report, USDA reported net sales of 225,100 metric tons (MT) for delivery in marketing year 2015/16, which is down 43% from the previous week and 45% lower than the prior 4-week average; it was also below trade expectations of 300,000 to 500,000 MT. Total known outstanding sales and accumulated exports of all classes of wheat for marketing year 2015/16, through Dec. 3, 2015 were 14.7 million metric tons (MMT), 15% lower than last year's year-to-date total of 17.4 MMT.
  • In the December WASDE report, USDA increased its projection for 2015/16 global wheat production by 2 MMT to 735 MMT based on better than expected Canadian and European production. If realized, 2015/16 would be the third consecutive record crop. Total U.S. wheat exports are forecast to remain unchanged at 21.8 MMT, but hard red spring (HRS) exports are expected to decrease by 300,000 MT with a corresponding increase in hard red winter (HRW) exports.
  • In its Dec. 4 report, the Brazil Ministry of Agriculture, Livestock and Supply (Conab) lowered its forecast for Brazilian wheat production to 5.6 MMT, down from the November estimate of 6.2 MMT. Conab also reported that untimely rains resulted in quality issues in the Rio Grande do Sul and lower test weights in Paranรก. These regions, on average, account for 90% of Brazilian wheat production.
  • USDA Baseline projections forecast U.S. planted wheat acres will fall 3% in 2016/17, but an expected yield increase will offset and 2016/17 U.S. wheat production is expected to total 56.1 MMT, up just slightly from 2015/16 production of 55.8 MMT. The complete report will be released in February.
  • Argentina may cut export taxes on wheat as early as next week, according to Reuters.
  • The Baltic Panamax Index closed at 534, down 7% from 574 last week.
  • The Dollar Index closed at 97.54, down 1% from 98.37 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 151211.pdf
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