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Price Report – July 27, 2018

Price Report – July 27, 2018

July 27, 2018

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  • Supported by technical buying, spring wheat tour yield estimates and shrinking estimates for Russian and European Union (EU) wheat production, wheat futures rose this week. Slow export demand resulting from a strengthening U.S. dollar and uncertainty surrounding U.S. trade policies limited gains. CBOT September wheat added 14 cents to close at $5.30/bu, KCBT increased 24 cents to $5.32/bu and MGEX grew 37 cents to $5.92/bu.
  • Pacific Northwest (PNW) hard red winter (HRW) export basis softened this week pressured by increased farmer selling. Elsewhere in the United States, export basis remained steady this week as the market digested the Wheat Quality Council Spring Wheat tour results. Slow export demand for wheat continues to pressure export basis. Uncertainty surrounding U.S. soybean exports continues to chip away at export basis in October and November as exporters try to maintain a steady flow of U.S. grain through their facilities.
  • USDA’s weekly Export Sales Report included net wheat sales of 385,900 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 6.81 million metric tons (MMT), 31% behind last year’s year-to-date total of 9.92 MMT. USDA expects 2018/19 U.S. wheat exports to reach 26.5 MMT.
  • On July 23, USDA reported winter wheat harvest was 80% complete, slightly ahead of the 5-year average of 79%. USDA reported 96% of U.S. spring wheat has headed, ahead of the 5-year average of 93%. USDA rated 79% of spring in good to excellent condition, down from 80% last week.
  • The July 26 U.S. Drought Monitor reported warm, dry weather was common over much of the country, enabling farmers in the PNW and U.S. Northern Plains to begin HRW harvest. Light rain fell across North Dakota and South Dakota. The current forecast expects hot, dry conditions across most of the United States, while the U.S. High Plains could receive additional rainfall.
  • TThe Wheat Quality Council estimated the 2018/19 hard red spring (HRS) yield at 41.1 bu/acre, up from last year’s estimate of 38.1 bu/acre, but still below the 5-year average. The estimate does not consider abandoned acres.

U.S. Drought Monitor

  • The July 26 U.S. Drought Monitor reported warm, dry weather was common over much of the country, enabling farmers in the PNW and U.S. Northern Plains to begin HRW harvest. Light rain fell across North Dakota and South Dakota. The current forecast expects hot, dry conditions across most of the United States, while the U.S. High Plains could receive additional rainfall.

  • On July 20, FranceAgriMer reported French wheat harvest is 88% complete, up from 64% last week and 10 days ahead of the 5-year average.
  • According to UkrAgroConsult rain has slowed harvest progress in Ukraine, but farmers are still ahead of last year’s pace. Winter wheat harvest in Ukraine is 67% complete, with farmers harvesting 14.7 MMT of winter wheat thus far.
  • The Russian Agriculture Ministry reported Russian farmers have harvested 27.9 MMT of wheat from 18.0 million acres (7.3 million hectares) as of July 20.
  • Bolsa de Cereales, the Buenos Aires Grain Exchange, reported Argentina wheat planting is 96% complete as of July 26, significantly ahead of last year’s pace.

Baltic and U.S. Dollar Indices

  • The Baltic Index stands at 1,708. Please note the Baltic Index section in the Price Report link reflects last week’s figure. We apologize for the error.
  • The Dollar Index slipped this week to 94.64. Please note the Dollar Index section in the Price Report link reflects last week’s figure. We apologize for the error.