Friday, April 20, 2018
- Forecasts for warmer weather across the U.S. Northern Plains and rain across the drought-stricken hard red winter (HRW) growing area pressured wheat futures lower this week. CBOT May fell 9 cents to $4.63/bu, KCBT dropped 13 cents to $4.83/bu, and MGEX lost 17 cents to $6.00/bu. CBOT May corn finished down 10 cents at $3.76/bu and CBOT May soybeans closed 25 cents lower at $10.29/bu.
- Due to the drought in the Southern Hemisphere, unusually high demand for U.S. corn continues to support export basis for wheat, which has to compete for freight and elevation capacity. Slow farmer selling and weather-related logistical delays across the U.S. Northern Plains, and residual delays from the past month’s fog and high water on the Gulf tributary rivers are also supporting export basis through June. With drought conditions worsening across the its growing areas, HRW protein premiums continue to narrow.
- USDA’s weekly Export Sales Report included net wheat sales reductions of 66,900 metric tons (MT) for marketing year 2017/18. Sales were well below trade expectations of 100,000 to 350,000 MT. Total known outstanding sales and accumulated exports of all classes of wheat for 2017/18, through April 12, 2018, were 23.0 million metric tons (MMT), 17% behind last year’s year-to-date total. USDA expects 2017/18 U.S. wheat exports to reach 25.2 MMT.
- On April 16, USDA rated 31% of the winter wheat crop in good to excellent condition, up slightly from last week, and 37% of winter wheat in poor or very poor condition. USDA reported 9% of winter wheat has headed, in line with the 5-year average. U.S. spring wheat planting is 3% complete, compared to the 5-year average of 15% on the same date. USDA noted planting in Minnesota, Montana and North Dakota has not started.
- The April 19 Drought Monitor reported heavy snow fell across the U.S. Northern Plains, providing beneficial moisture, but further delaying spring wheat planting. The storms forecasted for last week largely missed the drought-stricken HRW growing region. Instead, dry, windy conditions worsened drought conditions and pushed wildfires across western Oklahoma and neighboring states. Topsoil moisture was rated 72% short to very short in Kansas and Oklahoma, and 66% and 61% short to very short in Texas and Colorado, respectively. Forecasts call for warmer weather next week, which will help thaw frozen fields in the U.S. Northern Plains. There is also a chance for some drought-stricken areas to receive much needed rain.
- USDA Agricultural Attaché offices provided preliminary forecasts for 2018/19 wheat production from the following countries: Ukraine at 26.6 MMT, down from 27.0 MMT in 2017/18; Canada at 29.9 MMT, in line with the previous year; European Union (EU) at 151 MMT, down slightly year over year; Kazakhstan at 14.0 MMT, down from 14.8 MMT in 2017/18; and Australia at 24.0 MMT, up from 21.5 MMT in 2017/18.
- Reuters reported spring wheat planting in Ukraine is 38% complete, up from 15% complete last week, but significantly behind last year’s pace of 92% completion on the same date. Ukrainian farmers are expected to plant 450,000 acres (182,000 hectares) of spring wheat in 2018/19, down 5% from last year, if realized.
- FranceAgriMer rated 78% of French common wheat in good to excellent condition, unchanged from the week prior.
Baltic and U.S. Dollar Indices
- The Baltic Index climbed to 1201, up from 1014 last week.
- The Dollar Index rose slightly to 90.12 from 89.80 last week.
Source: U.S. Wheat Associates Price Report