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U.S. Wheat Associates Price Report

U.S. Wheat Associates Price Report

Friday, May 4, 2018

Read the full report as a PDF

  • KCBT wheat futures closed the week sharply higher after Wheat Quality Council scouts forecast lower hard red winter (HRW) production in drought-stricken Kansas and Oklahoma. Spring wheat planting progress pressured MGEX futures, but continued strength in new crop sales limited losses. CBOT May wheat added 32 cents to $5.27/bu, KCBT gained 23 cents to $4.83/bu, and MGEX finished flat at $6.30/bu. CBOT May corn closed 9 cents higher at $3.99/bu and CBOT May soybeans fell 19 cents to $10.29/bu.
  • High demand for U.S. corn continues to support export basis for wheat, which competes for freight and elevation capacity. With hard red spring (HRS) farmers focused on planting, exporters are struggling to entice farmers to halt planting progress and bring wheat to the elevator, which supported higher HRS export basis across the United States. High water delays on the Gulf tributary system also supported Gulf export basis
  • USDA’s weekly Export Sales Report included net wheat sales of 234,800 metric tons (MT) for marketing year 2017/18. Sales were above trade expectations of 0 to 300,000 MT. Total known outstanding sales and accumulated exports of all classes of wheat for 2017/18, through April 26, 2018, were 23.5 million metric tons (MMT), 16% behind last year’s year-to-date total. USDA expects 2017/18 U.S. wheat exports to reach 25.2 MMT.
  • On April 30, USDA rated 33% of the winter wheat crop in good to excellent condition, up from 31% last week, and 37% of winter wheat is in poor or very poor condition. USDA reported 19% of winter wheat has headed, behind the 5-year average of 30%. U.S. spring wheat planting is 10% complete, compared to the 5-year average of 36% on the same date.
  • The U.S. Hard Winter Wheat Tour estimated 2018/19 Kansas wheat production at 6.61 MMT (243 million bushels), down 24% from last year and the smallest since 1988/89, if realized. Photos from the tour were posted on Twitter using hashtag #WheatTour18.
  • Beginning in the May 10 report, USDA will add a new line to its world balance totals for wheat and rice to show global supply and demand after subtracting China to better reflect current production, consumption and trade trends.

U.S. Drought Monitor

  • The May 3 Drought Monitor reported the U.S. Southern Plains received small amounts of precipitation during the reporting period, which provided some minor relief to dry pasture and rangelands as well as helped to reduce wildlife danger. In Texas, some isolated heavy rainfall activity brought relief to the western Panhandle. Additional rain fell across portions of the central and southern Plains after the cutoff time for this week’s map, and will be reflected next week. Dry conditions expanded across North Dakota this week due to precipitation shortfalls during the past 60 days. Topsoil moisture in North Dakota was reported as 45% short to very short with subsoil moisture at 50% short to very short. In northeastern Montana, drought conditions improved this week; still, precipitation across the U.S. Northern Plains has been below normal since October 1. Forecasts expect additional rain to fall on the dry HRW-growing areas.

  • FranceAgriMer rated 78% of French common wheat in good to excellent condition, compared to 77% good to excellent the week prior.
  • According to the Government of Saskatchewan Crop Report, farmers in Saskatchewan began spring planting this week with variable soil conditions. Northern and eastern regions of Saskatchewan are dealing with wet field conditions, while southern regions are dry. Topsoil moisture for the province is rated 6% surplus, 64% adequate and 30% short to very short.
  • Australian farmers are planting winter wheat in historically dry soil, according to Reuters. Western Australia, the largest wheat-producing state, received just 27% of normal precipitation in March and April.

Baltic and U.S. Dollar Indices

  • The Baltic Index climbed to 1376, up from 1361 last week.

Source: U.S. Wheat Associates