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June 9, 2017
  • Worsening drought conditions in the U.S. Northern Plains spring and durum wheat production region and concern about hard red winter (HRW) yields and protein pushed wheat futures sharply higher this week. CBOT July wheat increased 16 cents to $4.46/bu, KCBT climbed 18 cents to $4.51/bu and MGEX added 23 cents to $6.06/bu. CBOT July corn grew 15 cents to $3.88/bu and CBOT July soybeans gained 20 cents to $9.41/bu.
  • Crop condition and harvest progress concerns supported hard red spring (HRS) and HRW export basis across the United States this week. Slow farmer selling also supported export basis. Concern about protein levels in the HRW crop continue to support widening protein premiums.
  • USDA’s weekly Export Sales Report included net wheat reductions of 461,000 metric tons for marketing year 2017/18. Sales were within trade expectations of 350,000 to 550,000 MT. Total known outstanding sales and accumulated exports of all classes of wheat for 2017/18, through June 1, 2017, were 6.61 million metric tons (MMT), 15% higher than a total of 5.76 MMT last year on this date, and 10% above the 5-year average.
  • On June 4, USDA rated 49% of the winter wheat crop in good to excellent condition, down slightly from last week; 15% of winter wheat is in poor or very poor condition. USDA reported 87% of winter wheat had headed, which is slightly below the 5-year average. Winter wheat harvest is 10% complete, ahead of the 5-year average pace of 7%. Spring wheat emergence is 90% complete, compared to the 5-year average of 85%. USDA rated 55% of the spring wheat crop in good to excellent condition compared to 62% last week; 11% of spring wheat is in poor or very poor condition.
  • The June 8 U.S. Drought Monitor reflected intensifying dry, warm conditions across the U.S. Northern Plains. Eighty-seven percent of North Dakota and 50% of South Dakota are in either a moderate or severe drought. Similarly, dry conditions are expanding across northern Minnesota and eastern Montana. Soft red winter (SRW) and HRW growing regions experienced a few storms, but harvest progressed with minimal delays. Rain forecast for the next 5 days across the U.S. Northern Plains would provide some relief for the emerging wheat crop.
  • In its June World Agricultural Supply and Demand Estimate update, USDA forecast world beginning stocks to increase to 256 MMT, up 6% year over year. World wheat production is expected to decline 2% to an estimated 739 MMT. Global trade will slip slightly to 179 MMT and global consumption will decrease slightly to 735 MMT in in 2017/18. U.S. production will fall to an estimated 49.6 MMT, down 21% year over year, if realized. U.S. beginning stocks will climb to a projected 31.6 MMT, up 19% from 2016/17 and the largest beginning stocks since 1988/89, if realized. USDA believes U.S. exports will decrease slightly to 27.2 MMT, down 3% from the current 2016/17 forecast of 28.2 MMT.
  • FranceAgriMer rated 75% of French common wheat in good or excellent condition, unchanged from the prior week.
  • As of June 8, Bolsa de Cereales, the Buenos Aires Grain Exchange, reported Argentine farmers were 21% complete with wheat planting, up from 11% complete the prior week. Bolsa noted wet field conditions were delaying planting in some areas.
  • According to the Saskatchewan weekly crop report, spring planting is 94% complete, slightly ahead of the 5-year average pace of 93%. Spring wheat planting in Alberta is 95% complete, up from 84% complete last week. In Alberta, 66% of the crop has emerged compared to last year’s pace of 91%.
  • The Baltic Index fell to 824, down from 830 last week.
  • The Dollar Index decreased to 97.41, down slightly from last Friday’s close of 97.71.
  • Current hard red spring (HRS) price indications are for Northern Spring. Dark Northern Spring is available, but premiums vary. SRW indications are for a minimum falling number of 250. Higher minimum specifications will carry a premium.

File Name
PR 170609.pdf
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