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June 22, 2007
(See attached file: PR070622.pdf)(See attached file: PR070622.xls)

  • Wheat futures were on a roller coaster this week. Markets fell early in the week, taking a rest after the run-up last week. Chicago nearbys closed Tuesday down 26 cents/bu from Friday. Wednesday morning strong thunderstorms rolling through Oklahoma and Kansas pushed markets back to Friday's levels. Thursday, news of a 160,000 MT HRS export sale shifted market focus to new crop protein, driving Minneapolis futures up 15 cents on intermarket spreads. Forecasts for beneficial weather globally - EU/U.S./Canada drying out, rains in the Southern Hemisphere - sent prices down today as markets expect clarity on the yield and quality of the HRW harvest by the middle of next week.
  • From last week, CBOT July futures fell 14 cents/bu and the KCBT is down 26 cents/bu while the MGE was up 14 cents/bu. Corn futures were down 52 cents/bu from last week. Since the beginning of the rally 5 weeks ago SRW futures are up $1.04/bu ($38/MT), HRW $1.00 cents/bu ($37/MT) and HRS $1.21 cents/bu ($44/MT).
  • Trader comments on the HRW harvest and today's Kansas Wheat Harvest Report confirm a highly variable quality and yield as the harvest is just getting underway. The USDA Crop Progress Report shows that only 2% of the Kansan crop has been harvested, compared to the 19% average - and 48% last season. The harvest in Oklahoma is reportedly about 70% complete with very limited pockets of good quality.
  • HRW protein scales are currently difficult to define as new crop quality remains unclear. Premiums for high protein grain are at the upper end of trader quotes.
  • The U.S. Commercial Sales Report showed 541,000 MT of sales compared to trade estimates of 150,000 to 350,000 MT.
  • SRW basis shot up 15 cents/bu this week as traders tried to position grain for the 300,000 MT Moroccan tender and other business. Morocco withdrew that tender for the second time as the government still hasn't decided on specifics regarding import duties.
  • The HRS regional Crop Progress Report rates crop and weather conditions as generally excellent in the Northern Plains.
  • SW and SRW FOB prices were unchanged from last week, leaving the SW premium over SRW at $8/MT (23 cents/bu) from $25/MT just two weeks ago. With beneficial forecast for corn, CBOT corn futures lost ground to HRW this week. HRW futures at a $2.03/bu ($75/MT) premium to corn, up from $1.77/bu ($65/MT) last week.
  • Like wheat, ocean freight rates are very volatile, rebounding strongly this week from last week's dip as stormy weather delays coal loading in Newcastle Australia. Port operations are slowed, as well as rail lines feeding the port facilities, further delaying vessels and thereby absorbing ocean freight capacity. Rate estimates in the Atlantic are up $3/MT and the Pacific up $5/MT.

U.S. Commercial Sales Report:

Kansas Wheat Harvest Report:

USDA Crop Progress Report:

HRS Crop Progress Report:

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