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December 16, 2016
  • Buoyed by strong export demand, KCBT and MGEX wheat futures rose week over week. The U.S. dollar continues to strengthen weighing heavily on CBOT soft red winter (SRW) wheat futures, which faces strong competition from other origins. Freezing temperatures across the U.S. Southern Plains lent limited support. CBOT March wheat fell 7 cents to $4.09, KCBT added 1 cent to $4.15/bu and MGEX wheat climbed 13 cents to $5.44/bu. CBOT March corn lost 3 cents to $3.56/bu and CBOT January soybeans slipped 1 cent to $10.37/bu.
  • Snow and freezing temperatures are causing logistical challenges resulting in increased U.S. rail and barge freight rates, which supported export basis at all ports as exporters try to move wheat. Limited Pacific Northwest (PNW) export elevation capacity is available in January, resulting in higher export basis levels for all classes that month. The Columbia-Snake river system closure for planned maintenance begins today, Dec. 16. The Great Lakes-St. Lawrence Seaway System will close for the season on Dec. 20 and will reopen at the end of March.
  • USDA’s weekly Export Sales Report included net wheat sales of 531,300 metric tons (MT) for marketing year 2016/17. Sales were 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 Dec. 8, 2016, were 19.9 million metric tons (MMT), 32% higher than a total of 15.0 MMT last year on this date and 7% ahead of the 5-year average pace. USDA expects 2016/17 U.S. wheat exports to reach 26.5 MMT.
  • The Dec. 13 U.S. Drought Monitor shows drought conditions worsening across the U.S. Southern Plains. With drought stress and little to no snow cover, the wheat crop is more vulnerable to freeze damage.
  • On Dec. 15, Bolsa de Cereales, the Argentine Grain Exchange, reported favorable weather for harvest that was 57% complete, up from 41% last week. Southeast Buenos Aires, which accounts for 11% of total wheat planted area, is the only region where harvest is not underway. The average yield to date is 3.09 metric tons per hectare (MT/ha) (46.0 bu/acre) compared to 2.60 MT/ha (38.7 bu/acre) on the same date last year.
  • FranceAgriMer estimates French farmers planted 5.2 million hectares (78 million acres) of winter wheat this fall on par with last year’s planted area.
  • The Baltic Index fell to 966, down 14% from last week’s close of 1122 due to weaker demand for capsize vessels. However, industry analysts noted stronger demand for grain ships.
  • The Dollar Index rose to 103.04, up 1% from 101.45 last Friday.
  • 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.

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