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May 13, 2016
  • A firmer U.S. dollar and slightly bearish USDA 2016/17 projections pressured KCBT spot price wheat to its lowest level since 2006 midweek. However, better-than-expected export sales and bargain buying rallied U.S. wheat futures, which closed the week mixed. CBOT May wheat climbed 12 cents to $4.65/bu, KCBT grew 4 cents this week to $4.45/bu and MGEX fell 8 cents to $5.23/bu. CBOT May corn added 6 cents to $3.82/bu and CBOT May soybeans rallied 29 cents to $10.55/bu.
  • Protein premiums started to widen this week for hard red winter (HRW) due to large expected yields and few reports of stress to the wheat that could develop protein. The yield potential and expected high-quality of the HRW crop also pressured basis. Soft white basis softened slightly this week due to increased farmer selling.
  • In its weekly Export Sales Report, USDA reported net sales of 294,900 metric tons (MT) for delivery in marketing year 2015/16, which were up 65% from the previous week, and 24% higher than the prior 4-week average. Sales were well above trade expectations of 50,000 to 175,000 MT. Total known outstanding sales and accumulated exports of all wheat classes for marketing year 2015/16, through May 5, 2016, were 20.4 million metric tons (MMT), 12% lower than last year's year-to-date total of 23.2 MMT.
  • As of May 8, 57% of U.S. winter wheat had headed according to USDA, which rated 62% of the U.S. winter wheat crop as good to excellent, up from 61% last week. USDA rated just 7% of the crop as poor or very poor, unchanged from the prior week and down from 20% last year. USDA reported spring wheat planting at 77% complete compared to the 5-year average of 51%, and 39% of spring wheat had emerged compared to the 5-year average of 25%.
  • In its first supply and demand estimates marketing year 2016/17, USDA forecasts beginning stocks to increase to 243 MMT. That is up 12% year over year, which will more than offset the projected 1% decline in world wheat production projected at 727 MMT. Global trade will slip to 164 MMT, down from an estimated 167 MMT in 2015/16. Global consumption will set a new record for the fourth consecutive year at 712 MMT. Despite U.S. production falling to an estimated 55.4 MMT, USDA expects U.S. supplies will rise 6% due to beginning stocks climbing to 26.6 MMT, up 30% year over year and the largest beginning stocks since 1988/89, if realized. USDA believes U.S. exports will rebound to an estimated 23.8 MMT, up 12% from the current 2015/16 forecast.
  • Russian consultancy SovEcon increased its forecast for 2016/17 Russia wheat production to 61.1 MMT, up from the previous estimate of 59.0 MMT due to improved crop conditions. Russia produced 61.8 MMT of wheat in 2015/16.
  • On May 9, France AgriMer rated 87% of French soft wheat in good or excellent condition, unchanged from the week prior and compared to 91% at the same time last year.
  • According to Reuters, Argentine workers plan to begin a strike Friday night at midnight at the Rosario export hub, which handles 80% of Argentina’s grain exports.
  • The Baltic Index fell to 579 down 10% from last week’s close of 642.
  • The Dollar Index rose to 94.70, up 1% from 93.71 last Friday.
  • USW Harvest Reporting began on May 13. To read the report, click here*
  • 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 160513.pdf
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