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January 8, 2016
  • After falling to contract lows on Monday under pressure from the abundant global supply and a stronger U.S. dollar, wheat futures rebounded on technicals and closed the week with four straight days of gains. Northern Hemisphere winter wheat is in dormancy, leaving fundamentals unchanged. Since the last USW Price Report on Dec. 18, CBOT March wheat fell 8 cents to $4.78/bu. KCBT and MGEX wheat each lost 9 cents to $4.73/bu and $5.01/bu, respectively. CBOT March corn dropped 17 cents to $3.57/bu and CBOT January soybeans shed 13 cents over the holidays to close at $8.79/bu.
  • Week changes represent the change since the last Price Report of 2015 on December 18, 2015.
  • Gulf basis for nearby contracts is at a premium due to flooding on the Mississippi River. The Great Lakes are now closed, and typically reopen in late March. PNW basis softened for hard red spring (HRS) and ordinary protein soft white (SW), but strengthened for low protein SW, which is becoming difficult to source due to the smaller than normal, 2015/16 SW crop according to the trade. Hard red winter (HRW) basis firmed across the United States driven by increased demand from tenders for food aid donations.
  • In its weekly Export Sales Report, USDA reported net sales of 76,500 metric tons (MT) for delivery in marketing year 2015/16, a marketing year low. Sales were well below trade expectations of 200,000 to 400,000 MT. Total known outstanding sales and accumulated exports of all wheat classes for marketing year 2015/16, through Dec. 31, 2015 were 15.8 million metric tons (MMT), 15% lower than last year's year-to-date total of 18.6 MMT.
  • New yield data led the Buenos Aires Grain Exchange, Bolsa de Cereales, to increase its estimate of Argentine wheat production to 10.1 MMT from its previous estimate of 9.5 MMT. Argentina’s 2015/16 wheat harvest is 87% complete as of Jan. 7, behind the 2014/15 pace of 96% complete on the same date due to rain delays that also have hurt wheat quality.
  • The U.S. Coast Guard restricted barge traffic on portions of the Mississippi River after heavy rains caused flooding last week.
  • Egypt’s agricultural quarantine authority imposed a zero tolerance requirement for ergot in imported wheat on Wednesday.
  • Informa Economics, a private U.S. analytic firm, lowered its estimate of India’s 2016/17 wheat production by 4 MMT to 85 MMT on lower winter sowing due to drought.
  • The Baltic Panamax Index closed at 445, a record low. In 2015, the Baltic Panamax Index fell 21% from its Jan. 1, 2015 starting value of 608.
  • The Dollar Index closed at 98.60. In 2015, the Dollar Index never fell below its Jan. 1, 2015 starting value of 91.08. The last time the Dollar Index spent twelve consecutive months above 90 was 2003.
  • Current 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 160108.pdf
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