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June 16, 2017
  • Spring wheat crop conditions fell to the lowest point in almost 30 years this week causing MGEX futures to rally to its highest point since December 2014. Expectations of a smaller, lower protein hard red winter (HRW) crop supported KCBT and CBOT to nearly one-year highs. Dry conditions in the European Union also lent limited support. CBOT July wheat increased 19 cents to $4.65/bu, KCBT climbed 22 cents to $4.73/bu and MGEX added 26 cents to $6.32/bu. CBOT July corn fell 4 cents to $3.84/bu and CBOT July soybeans lost 2 cents to $9.39/bu.
  • Farmer selling generally increases during harvest; however, this year traders note a higher percentage of soft red winter (SRW) and hard red winter (HRW) being placed directly into storage supporting export basis. HRW protein premiums continue to widen as preliminary test results continue to show lower protein in the 2017/18 crop.
  • USDA’s weekly Export Sales Report included net wheat sales of 373,400 (MT) 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 8, 2017, were 6.98 million metric tons (MMT), 7% higher than a total of 6.52 MMT last year on this date, and 7% above the 5-year average. USDA expects 2017/18 U.S. wheat exports to reach 27.2 MMT.
  • On June 12, USDA rated 50% of the winter wheat crop in good to excellent condition up slightly from last week; 16% of winter wheat is in poor or very poor condition. USDA reported 92% of winter wheat had headed, in line with the 5-year average of 91%. Winter wheat harvest is 17% complete, ahead of the 5-year average pace of 15%. Spring wheat emergence is 95% complete, compared to the 5-year average of 92%. USDA rated 45% of the spring wheat crop in good to excellent condition compared to 55% last week; 20% of spring wheat is in poor or very poor condition.
  • The June 13 U.S. Drought Monitor showed 83 percent of North Dakota is in a moderate or severe drought and the rest is abnormally dry. Similarly, eastern Montana and 79 percent of South Dakota are abnormally dry or in a moderate to severe drought. Soft red winter (SRW) and HRW harvest progressed with minimal delays. The 5-day forecast expects above average temperatures and low chances of rain across the Northern Plains.
  • FranceAgriMer rated 74% of French common wheat in good or excellent condition, down slightly from the prior week.
  • As of June 8, Bolsa de Cereales, the Buenos Aires Grain Exchange, reported wheat planting was 37% complete in Argentina, up from 21% complete the prior week. Bolsa noted wet field conditions continue to delay planting in some areas.
  • According to the Saskatchewan weekly crop report, spring planting is nearly complete, slightly ahead of the 5-year average pace of 97%. Topsoil moisture is rated 40 percent short or very short compared to 8 percent short or very short last year. Spring wheat planting in Alberta is 96% complete, up from 95% complete last week. Crop emergence in Alberta is 86% complete and 80% of spring wheat is rated in good to excellent condition compared to 83% good to excellent last year.
  • Stratégie Grains lowered its 2017/18 forecast for European Union wheat production to 142 MMT, down 1.10 MMT from last month’s forecast, but still 4% above 2016/17 total production. The analyst group noted dry conditions are hurting yield potential in Spain, France, and Germany.
  • The Australian Bureau of Agriculture, Resource Economics and Rural Sciences (ABARES) expects 2017/18 Australian wheat production to total 24.2 MMT, down 11 MMT from 2016/17 and 5% below the 5-year average.
  • The Baltic Index rose to 855, up from 849 last week.
  • The Dollar Index increased to 97.43, up slightly from last Friday’s close of 97.27.
  • 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 170616.pdf
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