Friday, May 11, 2018
- USDA projected larger than expected 2018/19 U.S. wheat production, pressuring wheat futures lower this week. Slow export sales also weighed on markets. CBOT July wheat fell 27 cents to $4.99/bu, KCBT lost 38 cents to $5.18/bu, and MGEX decreased 18 cents to $6.05/bu. CBOT July corn dropped 10 cents to $3.96/bu and CBOT July soybeans closed 33 cents lower at $10.03/bu.
- Poor hard red winter (HRW) crop conditions are causing many farmers to delay selling new crop wheat as they wait for harvest to begin, supporting export basis. Farmer selling of hard red spring (HRS) is also slow, as farmers are focused on getting the 2018/19 crop in the ground. Export capacity across the United States continues to be limited in the first half of June due to increased demand from corn and soybeans. Unseasonably high freight costs from residual delays and increased corn and soybean demand also supported export basis.
- USDA’s weekly Export Sales Report included net wheat sales of 35,200 metric tons (MT) for marketing year 2017/18. Sales were within trade expectations of 0 to 350,000 MT. Total known outstanding sales and accumulated exports of all classes of wheat for 2017/18, through May 3, 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 24.8 MMT.
- On May 7, USDA rated 34% of the winter wheat crop in good to excellent condition, up from 33% last week, and 37% of the winter wheat is in poor or very poor condition. Though winter wheat conditions improved, 50% of Kansas, 68% of Oklahoma and 60% of Texas winter wheat is in poor or very poor condition. USDA reported 33% of winter wheat has headed, behind the 5-year average pace of 41%. U.S. spring wheat planting is 30% complete, behind the 5-year average pace of 51% on the same date; 4% of spring wheat has emerged, compared to the 5-year average of 22%.
- On May 10, USDA forecast 2018/19 world wheat production to fall for the first time in 5 years in its monthly World Agricultural Supply and Demand Estimate (WASDE). USDA expects global wheat production to fall to 748 MMT, down 1% from 2017/18. Global trade will reach a record 188 MMT in 2018/19, 9% above the 5-year average. 2018/19 global consumption will set a sixth consecutive record at 754 MMT. World ending stocks will fall to 264 MMT, down 2% from 2017/18, if realized. 2018/19 U.S. wheat production will total 49.8 MMT, up 5% from last year.
- The May 10 U.S. Drought Monitor reported above average temperatures were recorded across the United States. A few scattered storms missed the driest HRW-regions in Colorado, Kansas, Oklahoma and Texas. Western Kansas and Oklahoma and the Texas panhandle are now almost entirely in an extreme to exceptional drought, which is reflected in this week’s winter wheat crop conditions for those states. The current forecast expects above normal temperatures to continue next week, which will worsen drought conditions.
- FranceAgriMer rated 78% of French common wheat in good to excellent condition, unchanged from the week prior.
- According to the Ukraine Agriculture Ministry, spring wheat planting is 92% complete, significantly behind last year’s pace. The Ministry also noted a reduction in planned spring wheat area from the April forecast of 450,000 acres (182,000 hectares) to 437,000 acres (177,000 hectares), due to a shift to peas and oats.
- According to the Saskatchewan weekly crop report, a late spring has delayed spring seeding in the province. As of May 7, 9% of spring planting (all crops) was complete, compared to the 5-year average of 19%. In Alberta, 9% of spring wheat planting is complete, compared to 14% complete on the same date last year.
Baltic and U.S. Dollar Indices
- The Baltic Index increased to 1453, up from 1384 last Friday.
- The Dollar Index fell slightly to 92.54 from 92.56 last week.
Source: U.S. Wheat Associates