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November 10, 2016
  • A strengthening U.S. dollar and technical selling drove CBOT and KCBT wheat futures lower. Support from strong export demand limited losses and pushed MGEX higher for the week. CBOT December wheat fell 9 cents to $4.05/bu, KCBT lost 3 cents to $4.09/bu and MGEX rose 5 cents to $5.15/bu. CBOT December corn dropped 5 cents to $3.43/bu and CBOT January soybeans added 7 cents to $9.98/bu.
  • December basis remains firm due to slow farmer selling and limited availability of export elevations. Corn and soybeans continue to tie up both freight and elevation capacity with many export terminals booked through the end of 2016. Beginning in January, lower rail freight pressures basis, but slow farmer selling and strong export demand limit downside potential. Soft white wheat basis increases in January due to the planned Columbia-Snake River system closure beginning on Dec. 16.
  • USDA’s weekly Export Sales Report included net wheat sales of 769,600 metric tons (MT) for marketing year 2016/17. Sales were well above trade expectations of 300,000 to 500,000 MT. Total known outstanding sales and accumulated exports of all classes of wheat for 2016/17, through Nov. 3, 2016, were 17.1 million metric tons (MMT), 31% higher than a total of 13.1 MMT last year on this date. USDA expects 2016/17 U.S. wheat exports to reach 26.5 MMT.
  • As of Nov. 7, U.S. winter wheat planting is 91% complete, up 5% from the prior week, and 79% of the crop had emerged compared to 70% last week. USDA rated 58% of the winter wheat crop in good to excellent condition, unchanged from last week, but up from 51% good to excellent the prior year.
  • USDA forecast world wheat production at 745 MMT, up 1% from the 2015/16 record of 735 MMT. If realized, it would be 5% above the 5-year average, and the fourth consecutive year of record world wheat production. Global trade will reach 174 MMT, 9% above the 5-year average. Global consumption will set a new record for the fourth consecutive year at 736 MMT. U.S. production is forecast at 62.9 MMT, up 12% from 2015/16. USDA believes U.S. exports will reach 26.5 MMT, up 26% year over year and on par with the 5-year average.
  • According to Reuters, Australian wheat harvest is 2 to 3 weeks behind the average pace due to cold, wet conditions.
  • On Nov. 10, Bolsa de Cereales, the Argentine Grain Exchange, reported harvest was 9% complete. Initial yields are lower expected. However, recent rainfall is expected to boost yield potential in southern Argentina, which is the main wheat-producing area. Bolsa de Cereales pegged Argentine wheat production at 12.5 MMT, unchanged from its previous estimate.
  • As of Nov. 9, Russian farmers have planted winter grains on 17.2 million hectares, compared to 15.8 million hectares on the same date last year due to favorable conditions. This is the largest winter grains planted area since 2009/10, when Russian farmers planted 17.9 million hectares of winter grains.
  • U.S. Wheat Associates published its annual Crop Quality report last week. To read it, click here*
  • The Baltic Index rose to 954, 12% higher than last week’s close of 849.
  • The Dollar Index rose to 98.76, up 2% from 97.05 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 161110.pdf
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