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January 27, 2017
  • Beneficial moisture fell across much of the United States earlier this week pressuring wheat futures markets lower. Strong U.S. export sales and a softer U.S. dollar lent limited support. CBOT March wheat dipped 3 cents to $4.20/bu, KCBT decreased 8 cents to $4.34/bu and MGEX wheat fell 16 cents to $5.60/bu. CBOT March corn dropped 4 cents to $3.62/bu and CBOT March soybeans lost 21 cents to $10.49/bu.
  • Export capacity is completely full in February and March for both the Gulf and Pacific Northwest (PNW). Exporters continue to work through a significant backlog of vessels. Heavy snow and subzero temperatures delayed vessel loading in the PNW and slowed rail freight across the United States while fog caused delays on the Mississippi River and in the Gulf. For any new business to be booked for February or March, demurrage has to be paid for the vessels that are sitting in port that would be displaced. That extra demurrage cost can be seen in steadily rising February and March export basis. Soft white wheat export basis received additional support from the Columbia-Snake river system closure for planned maintenance that will run through March. The Great Lakes-St. Lawrence Seaway System will reopen at the end of March.
  • USDA’s weekly Export Sales Report included net wheat sales of 853,400 metric tons (MT) for marketing year 2016/17. Sales were significantly higher than trade expectations of 200,000 to 400,000 MT. Total known outstanding sales and accumulated exports of all classes of wheat for 2016/17, through Jan. 19, 2017, were 22.4 million metric tons (MMT), 34% higher than a total of 16.7 MMT last year on this date, and 10% above the 5-year average. USDA expects 2016/17 U.S. wheat exports to reach 26.5 MMT.
  • The Jan. 26 U.S. Drought Monitor reported that moderate to heavy precipitation fell across most of the United States. The most significant improvements occurred in California and the Southeast. The 5-day forecast shows few chances for more precipitation.
  • Reuters reports that next week subzero temperatures are expected across two major wheat-producing areas in Russia. The southwestern part of Rostov and northwestern part of Krasnodar currently have no snow, leaving the wheat vulnerable to the subzero temperatures.
  • The Baltic Index fell to 840, down 12% from 952 last week.
  • The Dollar Index declined 1% week over week to 100.59.
  • 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 170126.pdf
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