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July 7, 2017
  • Wheat futures climbed higher this week supported by worsening crop conditions in the U.S. Northern Plains. Concerns over hot, dry conditions in Australia and overly wet conditions in Argentina lent additional support. CBOT September wheat futures gained 9 cents to $5.36/bu, KCBT added 13 cents to $5.43/bu and MGEX climbed 29 cents to $7.69/bu. CBOT September corn grew 11 cents to $3.92/bu and CBOT August soybeans jumped 54 cents to $10.01/bu.
  • Farmers are waiting to see if the wheat futures rally will peak before committing to significant sales, supporting export basis across the United States as exporters work to meet demand. Hard red winter (HRW) protein premiums softened slightly this week as harvest moved north into drought areas where combines found some pockets of higher-protein HRW. Hard red spring (HRS) and durum export basis continues to climb as crop conditions deteriorate. Good export demand for soft white (SW) and slow farmer sales supported SW export basis this week.
  • USDA’s weekly Export Sales Report included net wheat sales of 375,300 metric tons (MT) for marketing year 2017/18. Sales were within trade expectations of 300,000 to 500,000 MT. 2017/18 total known outstanding sales and accumulated exports of all classes of wheat through June 29, 2017 were 8.39 million metric tons (MMT), 1% lower than 8.46 MMT last year on this date, but 3% above the 5-year average. USDA expects 2017/18 U.S. wheat exports to reach 27.2 MMT.
  • On July 3, USDA rated 48% of the winter wheat crop in good to excellent condition down slightly from last week while 17% is in poor or very poor condition. Winter wheat harvest is 53% complete, behind the 5-year average pace of 54%. USDA rated 37% of the spring wheat crop in good to excellent condition compared to 40% last week while 33% is in poor or very poor condition. USDA reported 59% of spring wheat had headed, ahead the 5-year average of 54%.
  • The July 6 U.S. Drought Monitor reported drought conditions continue to worsen and spread across the U.S. Northern Plains. Topsoil moisture (percent short to very short) is as follows: Montana69%; Nebraska56%; North Dakota53%; and South Dakota63%. Scattered storms occurred across soft red winter (SRW) and HRW growing areas, bringing heavy rainfall and, in some places damaging hail. Nonetheless, harvest continues to progress with minimal delays. The extended forecast expects continued hot, dry conditions across the drought-stricken region.
  • FranceAgriMer rated 66% of French common wheat in good or excellent condition, up slightly from the prior week. Rain slowed harvest this week, which was 6% complete, up from 4% complete the prior week.
  • As of July 6, Bolsa de Cereales, the Buenos Aires Grain Exchange, reported Argentine farmers were 73% complete with wheat planting, up from 65% complete the prior week and on par with last year’s pace. Heavy rain delayed planting and exacerbated wet field conditions in Buenos Aires and La Pampa, two large wheat producing regions, leading to concerns about decreased planted area. Bolsa currently expects Argentine planted wheat area to total 13.6 million acres (5.5 million hectares) in 2017/18.
  • The Saskatchewan weekly crop report noted lack of rainfall is slowing crop development in some areas. Topsoil moisture conditions continue to vary widely across the province, with 5% of topsoil moisture rated excessive and 46% rated short or very short. In Alberta, 77% of spring wheat is rated in good to excellent condition compared to 80% last week. Surface soil moisture is rated 66% good to excellent, down slightly from last week and 13% is rated excessive.
  • The Australian Bureau of Meteorology reported June rainfall was the second lowest on record, 62% below the long-term mean. With current rainfall deficits, Australian producers expect 2017/18 wheat to decline due to smaller yields.
  • The Baltic Index fell to 829, down 8% week over week.
  • The Dollar Index rose to 95.97, up slightly from last Friday’s close of 95.63.
  • Current 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.

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PR 170707.pdf
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