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U.S. Wheat Associates Price Report

U.S. Wheat Associates Price Report

Friday, June 8, 2018

Read the full report as a PDF

  • U.S. wheat futures finished the week slightly lower after a round of profit-taking on Friday. Forecasts for lower wheat production in Ukraine, Russia and Australia provided limited support. CBOT July wheat lost 3 cents to close at $5.20/bu; KCBT July wheat dropped 2 cents to close at $5.38/bu; MGEX July wheat decreased 6 cents to close at $5.97. CBOT July corn fell 14 cents to $3.78/bu and CBOT July soybeans plummeted 51 cents to $9.69/bu.
  • Traders decreased discounts for lower protein hard red winter (HRW) following preliminary harvest reports from drought-stricken HRW areas. Logistical issues continue to support nearby export basis as railroads work to hire additional employees to meet the demand for rail freight. Exporters noted that U.S. wheat demand is slow at least in part because overseas buyers are uncertain about what might happen next with trade negotiations.
  • USDA’s weekly Export Sales Report included net wheat sales of 250,900 metric tons (MT) for marketing year 2018/19. Total known outstanding sales and accumulated exports of all classes of wheat for the 2018/19 marketing year were 4.22 million metric tons (MMT), 36% behind last year’s year-to-date total of 6.61 MMT. USDA expects 2018/19 U.S. wheat exports to reach 25.2 MMT.
  • On June 4, USDA reported winter wheat harvest was 5% complete, slightly ahead of the 5-year average. Last week’s harvest estimates were provided by Plains Grains Inc. as USDA had not begun reporting harvest completion at that time. USDA rated the winter wheat crop 37% good to excellent, down from 38% a week ago and 35% of the winter wheat is in poor or very poor condition. USDA reported U.S. spring wheat planting is 97% complete, ahead of the 5-year average pace; 81% of spring wheat has emerged, in line with the 5-year average. USDA rated 70% of spring in good to excellent condition, compared to 55% this time last year.

U.S. Drought Monitor

  • The June 6 U.S. Drought Monitor reported above average temperatures were recorded across the United States this week. Heavy rain fell across the U.S. Northern Plains this week, delaying the finish of planting, but providing beneficial moisture for emerging wheat. Still, dryness remains a concern in parts of the Northern Plains, especially western North Dakota and South Dakota. Conditions in the Pacific Northwest remain very good overall. Hot, dry conditions early in the week helped harvest advance in the U.S. Southern Plains before storms in the middle of the week (after the Drought Monitor cutoff) pushed farmers out of their fields. The current forecast expects widespread rain across the U.S. Plains, which would be beneficial for wheat in the North but delay harvest in the South.

  • FranceAgriMer rated 79% of French common wheat in good to excellent condition, unchanged from the week prior.
  • According to the Saskatchewan weekly crop report, spring grains (including wheat) planting was 96% complete as of June 7, up from 91% complete last week and well ahead of the 5-year average pace. The province received much-needed rainfall this week, though the amount varied from 0 to 10 inches (0 to 25.6 cm). Topsoil moisture was rated 12% surplus, 67% adequate and 21% short or very short. In Alberta, spring wheat planting is complete. Beneficial rain also fell across the province, improving soil moisture conditions.
  • According to Reuters, severe drought in eastern and southern Ukraine is hurting yield potential. Ukraine has not received measurable precipitation since April, and no rain is in the forecast for the next 7 days.
  • Russian consultancy IKAR reduced its forecast for 2018/19 Russian wheat production by 2.0 MMT to 71.5 MMT due to continued dry conditions, which are hurting yield potential.
  • Rabobank forecast 2018/19 Australian wheat exports to fall to 15.5 MMT. If realized, it would be the lowest level in 9 years and 28% below 2017/18 level. Fall planting in Australia was very dry, hurting stand establishment and causing some farmers to switch their acres to winter barley.

Baltic and U.S. Dollar Indices

  • The Baltic Index increased to 1395, up from 1156 last Friday.
  • The Dollar Index fell to 93.72, down from 94.16 last week.

Source: U.S. Wheat Associates