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March 31, 2017
  • Heavy rainfall across the U.S. Southern Plaines pressured KCBT futures lower this week. Strong export demand and a bullish USDA planted wheat area forecast limited KCBT losses and supported CBOT and MGEX wheat futures. CBOT May wheat added 2 cents to $4.26/bu, KCBT lost 7 cents to $4.20/bu and MGEX gained 3 cents to $5.43/bu. CBOT May corn increased 8 cents to $3.64/bu and CBOT May soybeans fell 30 cents week over week to $9.46/bu.
  • Lower rail and barge freight to the Gulf pressured export basis. The recent Algeria tender for durum provided much-needed clarity to the market and pressured durum prices lower. Pacific Northwest (PNW) logistics continue to improve, pressuring nearby PNW basis.
  • USDA’s weekly Export Sales Report included net wheat sales of 464,100 metric tons (MT) for marketing year 2016/17. Sales were above trade expectations of 250,000 to 450,000 MT. Total known outstanding sales and accumulated exports of all classes of wheat for 2016/17, through March 23, 2017, were 26.2 million metric tons (MMT), 36% higher than a total of 19.3 MMT last year on this date, and 8% above the 5-year average. USDA expects 2016/17 U.S. wheat exports to reach 27.9 MMT.
  • The March 28 U.S. Drought Monitor reported limited improvements in drought conditions across the United States, but noted that heavy rain across parts of the U.S. Southern Plains after this week’s reporting date. Any improvement will show up in next week’s Drought Monitor. The 10-day forecast includes another storm system to move across the U.S. Plains providing moderate to heavy rainfall.
  • The Mar. 31 Prospective Plantings report USDA forecast U.S. wheat planted area at 46.1 million acres (18.7 million hectares), down 9% from 2016/17 and the lowest planted area since records began in 1919. Hard red spring (HRS) acres are forecast at 10.6 million acres (4.3 million hectares), down 7%. USDA expects durum acres to fall 17% to 2.00 million acres (800,000 hectares). USDA pegged U.S. corn planted acres at 90.0 million acres (36.4 million hectares), down 4% year over year, if realized. Soybean planted area is estimated at a record high 89.5 million acres (36.2 million hectares), up 7% from 2016/17.
  • According to Reuters, India reinstated a 10% wheat import tax on March 28 after a 4-month hiatus.
  • The European Commission lowered its projection for 2017/18 European Union (EU) common wheat production to 142 MMT, down 800,000 MT from its February estimate. If realized, that would be 6% higher than 2016/17 production.
  • FranceAgriMer rated 90% of common wheat in good to excellent condition on March 27, down one percentage point from the prior week.
  • The International Grains Council (IGC) pegged 2017/18 global wheat production at 735 MMT, down 2% from 2016/17. If realized, it would be the first year over year decrease in global wheat production since 2012/13. IGC forecast global wheat consumption up from the estimated 735 MMT in 2016/17 to 740 MMT. If realized, global wheat consumption will outpace global wheat production for the first time since 2012/13.
  • The Baltic Index rose to 1324, up 11% from 1196 last week.
  • The Dollar Index increased to 100.42, up 1% from last Friday’s close of 99.67.
  • 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 170331.pdf
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