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July 22, 2016
  • Seasonal harvest pressure continued to weigh on wheat futures markets this week, but a short-covering rally limited losses for CBOT and KCBT end the week higher on improved export demand. Favorable weather in the Northern Plains pressured MGEX lower. Abundant global supplies continue to weigh on markets. CBOT September wheat ended the week flat at $4.25/bu, KCBT added 5 cents to $4.19/bu and MGEX dropped 10 cents to $4.86/bu. CBOT September corn lost 17 cents to $3.35/bu and CBOT September soybeans plunged 67 cents week over week to $9.99/bu.
  • The carry in the market continues to promote storage of wheat. As a consequence, farmer sales are slow and supportive of basis across the United States. Strong corn and soybean export demand continues to compete with wheat for elevation capacity, further supporting basis. Basis levels for the Pacific Northwest are firmer for the last quarter of 2016 due to planned maintenance closures on the Columbia and Snake River system. Fourth quarter basis for the Gulf and Lakes remains strong because corn and soybeans are competing for elevation and shuttle train capacity.
  • USDA’s weekly Export Sales Report included net wheat sales of 478,000 metric tons (MT) for marketing year 2016/17. Sales were in line with trade expectations of 350,000 to 550,000 MT. Total known outstanding sales and accumulated exports of all classes of wheat for 2016/17, through July 14, 2016, were 9.26 million metric tons (MMT), 33% higher than a total of 6.99 MMT last year on this date. USDA expects 2016/17 U.S. wheat exports to reach 25.2 MMT.
  • As of July 17, U.S. winter wheat harvest is 76% complete, just ahead of the 5-year average pace of 73% complete on the same date. USDA rated 69% of the spring wheat crop in good to excellent condition, down one percentage point from last week. USDA reported 96% of spring wheat had headed, compared to the 5-year average of 81% on the same date.
  • The Wheat Quality Council will hold its annual Hard Spring Tour next week. Follow #wheattour16 on Twitter to see live updates from the scouts.
  • Agriculture and Agri-Food Canada forecast Canadian 2016/17 wheat production (excluding durum) at 22.3 MMT up slightly from 2015/16 production. Higher yields are expected to offset a 7% reduction in planted area. Canadian durum production is estimated at 6.20 MMT, up 15% year over year due to both improved yields and increased planted area.
  • FranceAgriMer estimated French harvest at 17% complete compared to 53% on the same date last year, and rated 42% of French soft wheat in good or excellent condition, down from 49% the prior week. French consultancy Agritel pegged French production at 32.0 MMT, down 21% from last year if realized.
  • Agriculture consultancy IKAR estimated 2016/17 Russian wheat production at 68.0 MMT. If realized, that would be up 11% from 2015/16. As of July 20, Russian farmers had harvested 25.1 MMT of wheat from 21% of the planted area with an average yield of 4.25 MT/ha, up 12% from 2015/16 yields on the same date, according to Russia’s Agriculture Ministry.
  • Argentina’s Agriculture Ministry lowered its forecast for 2016/17 planted wheat area to 5.25 million hectares, down from its previous estimate of 5.34 million hectares.
  • The Baltic Index fell to 726, 2% lower than last week’s close of 738.
  • The Dollar Index climbed to 97.45, up 1% from 96.61 last Friday.
  • Current hard red spring (HRS) price indications are for Northern Spring. Dark Northern Spring is available, but premiums vary. Soft red winter (SRW) indications are for a minimum falling number of 250. Higher minimum specifications will carry a premium.

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PR 160722.pdf
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