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October 2, 2015
  • While wheat futures markets closed mostly higher for the fourth consecutive week after USDA lowered its U.S. wheat production estimate, farmer selling continues to be non-existent, and underlying fundamentals remain bearish. Ample global wheat supplies and weak export demand continue to weigh on the market as is evident from the marketing year low export sales numbers reported this week. Since hitting multi-year lows at the beginning of September, CBOT, KCBT and MGEX have rallied 55 cents, 50 cents and 42 cents, respectively, an average gain of 11% for the month. CBOT December wheat futures added 5 cents to reach $5.13/bu and MGEX grew 4 cents to $5.27/bu. KCBT wheat closed at $5.00/bu on par with last Friday. December CBOT corn was flat for the week at $3.89/bu and November CBOT soybeans dropped 15 cents to $8.74/bu.
  • 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.
  • Basis continues to soften for hard red winter (HRW) this week falling to $1.15 for HRW 12% protein from the Gulf, a low not seen since 2012 when KCBT wheat futures were above $6.00/bu for 18 weeks.
  • In its weekly crop progress update on Sept. 28, USDA reported winter wheat planting is 31% complete, behind the 5-year average of 35%, with winter wheat emergence at 7%.
  • USDA lowered U.S. wheat production estimates by 2.31 MMT to 55.8 MMT in its annual Small Grains Summary. Durum production is anticipated to be 53% greater than 2014 final harvest numbers, up 149,000 MT to 2.24 MMT due to a 41% increase in harvested acres year-to-year. SRW production is pegged at 9.77 MMT, down 21%, while HRW production is predicted to increase 12% to 22.5 MMT. HRS and soft white (SW) production forecasts are on par with 2014 levels.
  • USDA’s weekly Export Sales Report showed net sales of just 77,100 MT, a marketing year low, for delivery in marketing year 2015/16. That is down 73% from the previous week and 75% from the prior 4-week average and below trade expectations of 250,000 to 450,000 MT. Total known exports and outstanding sales for delivery in 2015/16 are 11.1 MMT, 18% lower than last year's year-to-date total of 13.6 MMT.
  • StatsCan increased its estimate of Canadian wheat production to 26.1 MMT, up 2 MMT from its August estimate, but still the smallest harvest in 4 years and down 11% from final 2014 harvest data. Canadian durum production is expected to be 9% less than 2014 at 4.74 MMT and spring wheat production is forecast 21% smaller at 19.0 MMT.
  • The EU increased its soft wheat harvest estimates by 3% to 145 MMT, up 4 MMT from August’s estimate.
  • Dry weather conditions persist in Russia where winter wheat planting is underway.
  • The Baltic Panamax Index closed at 889 on Friday, down 6% from 943 last week.
  • The US Dollar Index closed at 95.89, down from 96.32 last Friday.

File Name
PR 151002.pdf
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