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June 23, 2017
  • News of deteriorating spring wheat crop conditions continued supporting MGEX futures this week. Seasonal harvest supply pressure pushed CBOT and KCBT lower, although strong export demand lent limited strength. MGEX added 29 cents to $6.61/bu, CBOT July wheat lost 5 cents to $4.60/bu and KCBT fell 9 cents to $4.64/bu. CBOT July corn dropped 26 cents to $3.58/bu and CBOT July soybeans decreased 34 cents to $9.04/bu.
  • Seasonal harvest pressure softened hard red winter (HRW) Gulf export basis. Tropical Depression Cindy slowed Gulf vessel loading this week and provided limited support to July and August export basis. Hard red spring (HRS) protein premiums continue to widen, supported by deteriorating HRS conditions and strong demand for high protein wheat.
  • USDA’s weekly Export Sales Report included net wheat sales of 542,900 (MT) for marketing year 2017/18. Sales were above trade expectations of 300,000 to 500,000 MT. Total known outstanding sales and accumulated exports of all classes of wheat for 2017/18, through June 15, 2017, were 7.52 million metric tons (MMT), 8% higher than a total of 6.99 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 19, USDA rated 49% of the winter wheat crop in good to excellent condition, down slightly from last week; 16% of winter wheat is in poor or very poor condition. USDA reported 97% of winter wheat had headed, slightly ahead of the 5-year average of 95%. Winter wheat harvest is 28% complete, ahead of the 5-year average pace of 25%. USDA rated 41% of the spring wheat crop in good to excellent condition compared to 45% last week; 27% of spring wheat is in poor or very poor condition. USDA reported 15% of spring wheat had headed, slightly behind the 5-year average of 17%.
  • The June 20 U.S. Drought Monitor showed drought conditions continue to worsen in the U.S. Northern Plains. Forty percent of North Dakota is in a severe or extreme drought and the remainder of the state is abnormally dry or in a moderate drought. Similarly, 50% of South Dakota and the eastern third of Montana are in a moderate to extreme drought. Drought conditions are forcing early maturity in wheat as seen in USDA’s percent headed report. There were a few storms in soft red winter (SRW) and HRW growing regions, but not enough to delay harvest much. The 5-day forecast expects above average temperatures and provides few chances for rain across U.S. Northern Plains.
  • FranceAgriMer rated 68% of French common wheat in good or excellent condition, down from 74% the prior week due to hot, dry conditions. Wheat harvest began on Monday in the southwest.
  • As of June 22, Bolsa de Cereales, the Buenos Aires Grain Exchange, reported Argentine farmers had planted 53% of their wheat, up from 37% complete the prior week and 7% ahead of last year’s pace.
  • According to the Saskatchewan weekly crop report, recent rains provided beneficial moisture to emerging wheat. Topsoil moisture is rated 18 percent short or very short compared to 40 percent short or very short last week. In Alberta, 84% of spring wheat is rated in good to excellent condition compared to 83% last year. Surface soil moisture is rated 79% good to excellent; 14% of surface soil moisture is rated excessive.
  • Heading into the Southern Hemisphere’s winter months, above normal temperatures and below normal precipitation is threatening Australian wheat yield potential. According to the Australia Bureau of Meteorology, June precipitation levels are just 20% of the average for the month.
  • The Baltic Index remained steady at 855, unchanged week over week.
  • The Dollar Index increased to 97.38, up slightly from last Friday’s close of 97.16.
  • 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 170623.pdf
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