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December 8, 2017
  • CBOT and KCBT December wheat futures fell to contract lows this week due to a strengthening U.S. dollar. MGEX December wheat futures fell for the fourth consecutive week pressured by a larger than expected wheat crop in Canada. Steady export sales lent limited support. CBOT December wheat fell 22 cents to $3.92/bu, KCBT dropped 20 cents to $4.01/bu and MGEX lost 13 cents to $5.98/bu. CBOT December corn slipped 5 cents to $3.40/bu and CBOT January soybeans decreased 4 cents to $9.90/bu.
  • Elevation capacity for December is very limited, supporting export basis for nearby contracts. Demand for 12.0% protein (12% moisture basis) HRW across the United States is supporting HRW export basis. Farmer selling is very slow, further supporting export basis. Low water conditions continue to plague sections of the Ohio River, delaying barges. 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 321,400 metric tons (MT) for marketing year 2017/18. Sales were within trade expectations of 250,000 to 450,000 MT. Total known outstanding sales and accumulated exports of all classes of wheat for 2017/18, through November 30, 2017, were 17.5 million metric tons (MMT), 10% behind last year's year-to-date total. USDA expects 2017/18 U.S. wheat exports to reach 27.2 MMT.
  • The December 7 U.S. Drought Monitor reported this past autumn (September to November) was the 10th warmest on record. The warm weather combined with a lack of precipitation in October and November caused drought conditions to expand and worsen for most of the United States. The two notable exceptions being the Pacific Northwest and the upper Midwest, which both received timely, beneficial rainfall.
  • The Australia Bureau of Agricultural and Resource Economics and Sciences (ABARES) forecast 2017/18 Australian wheat production to fall 20.3 MMT following recent storms that damaged the crop and a severe drought throughout the growing season that limited yield potential. If realized, that would be 20% below the 5-year average.
  • On December 7, Bolsa de Cereales, the Buenos Aires Grain Exchange, reported Argentine wheat harvest is 45% complete, up from 31% last week. To date, Argentinian farmers have harvested 6.10 MMT. Bolsa forecasts total Argentine wheat production at 17.0 MMT.
  • StatsCan reported Canadian farmers harvested 30.0 MMT of wheat in 2017/18, down 5% from last year, but significantly higher than the November USDA estimate of 27.0 MMT. USDA will update those estimates on Dec. 12.
  • Russian agricultural consultancy SovEcon increased its forecast for Russian wheat production to 84.2 MMT from 83.9 MMT due to larger than expected harvested area.
  • The Baltic Index rose to a 4-year high of 1679, up from the prior week’s close of 1626.
  • The Dollar Index increased to 94.04 from last Friday’s close of 92.88.

File Name
PR 171208.pdf
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