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October 28, 2016
  • Pressured by a stronger U.S. dollar and ample global supplies, U.S. wheat futures closed the week lower. Strong export sales continue to lend support. CBOT December wheat futures dropped 6 cents to $4.08/bu, KCBT lost 10 cents to $4.11/bu and MGEX fell 3 cents to $5.25/bu. CBOT December corn added 2 cents to $3.55/bu and CBOT November soybeans climbed 18 cents to $10.01/bu.
  • November and December basis remain firm due to 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.
  • USDA’s weekly Export Sales Report included net wheat sales of 646,100 metric tons (MT) for marketing year 2016/17. Sales were above trade expectations of 350,000 to 550,000 MT. Total known outstanding sales and accumulated exports of all classes of wheat for 2016/17, through Oct. 20, 2016, were 16.1 million metric tons (MMT), 26% higher than a total of 12.7 MMT last year on this date. USDA expects 2016/17 U.S. wheat exports to reach 26.5 MMT.
  • As of Oct. 23, U.S. winter wheat planting is 79% complete, behind the 5-year average pace of 82% complete on the same date, and 60% of the crop had emerged compared to 47% last week and the 5-year average of 58% emergence on the same date. In its first crop condition report for 2017/18 winter wheat, USDA rated 59% of the winter wheat crop in good to excellent condition, up from 47% the prior year.
  • The International Grains Council (IGC) increased its forecast for 2016/17 global wheat production to 748 MMT, up 1 MMT from its prior forecast based upon improved estimates from Kazakhstan and Russia.
  • According to Bolsa de Cereales, the Argentine Grain Exchange, harvest started this week in areas where hot, dry weather hastened wheat maturity. To-date, harvested area is 2.7% of total planted area. In other parts of Argentina where wheat development is closer to a normal pace, excessive rains caused flooding in low-lying areas. Argentine wheat harvest typically occurs from late November through January. The Argentine Agricultural Ministry pegged 2016/17 wheat production at 12.5 MMT, up from 10.4 MMT in 2015/16.
  • CBH Group, Western Australia’s primary grain marketer and handler, lowered its harvest estimate for the state to 13 to 14 MMT compared to its old estimate of 15 to 17 MMT due to widespread frost damage.
  • Russian Grain Union pegged winter grains sowing for 2017/18 at 17.3 million hectares, up 3% from the 16.8 million hectares planted in 2016/17.
  • U.S. Wheat Associates published its annual Crop Quality report this week. To read it, click here*
  • The Baltic Index rose to 798, 5% lower than last week’s close of 842.
  • The Dollar Index fell to 98.68, down 1% from 98.06 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 161028.pdf
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