August 24, 2018
- Technical selling and lower than expected export sales pushed U.S. wheat futures sharply lower this week. Tightening global wheat supplies provided limited support. CBOT and KCBT September wheat decreased 46 cents each to $5.15/bu and $5.19/bu, respectively. MGEX dropped 36 cents to $5.73/bu. CBOT September corn fell 16 cents to $3.48/bu and CBOT September soybeans declined 39 cents to $8.42/bu
- Nearby export basis firmed this week after futures dropped sharply and the September-December contract spreads widened. Rail and barge freight rates also provided underlying support. Limited farmer selling and slow export demand left deferred months mostly unchanged.
- USDA’s weekly Export Sales Report included net wheat sales of 239,800 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 8.56 million metric tons (MMT), 26% behind last year’s year-to-date total of 11.5 MMT. USDA expects 2018/19 U.S. wheat exports to reach 27.9 MMT.
- On August 20, USDA reported winter wheat harvest was 97% complete, slightly behind of the 5-year average of 98%. USDA reported U.S. spring wheat harvest is 60% complete, ahead of the 5-year average pace of 44%. USDA rated 74% of spring in good to excellent condition, down from 75% last week.
- The August 23 U.S. Drought Monitor noted drought conditions worsened across the U.S. Northern Plains and Pacific Northwest (PNW) following another hot, dry week. Temperatures in the U.S. Northern Plains reached as high as 104°F (40°C) in parts of North Dakota. The heat enabled harvest to progress quickly, but also increased the risk of wildfires. The current forecast shows some chances of rain and cooler temperatures across the drought-stricken regions.
- French consultancy Agritel expects 2018/19 Russian wheat exports to fall to 31.5 MMT, down from 42.0 MMT last year due to a21% year over year production drop to 67.4 MMT.
- According to Reuters, the milling quality portion of Ukraine’s wheat production is between 30% to 45%, down from 55% last year. Dry growing conditions transitioned into a rainy harvest season which damaged quality. Ukrainian farmers threshed 25.0 MMT of wheat in bunker weight, equal to about 24.5 MMT after cleaning.
- The Saskatchewan weekly crop report noted winter wheat harvest is 57% complete, up from 24% last week. Durum harvest is 14% complete, and spring wheat harvest is 5% complete. In Alberta, 60% of spring wheat is rated in good to excellent condition down slightly from the prior week. Spring wheat harvest is 3% complete and durum harvest is 7% complete.
- Bolsa de Cereales, the Buenos Aires Grain Exchange, rated 89% of Argentine wheat in normal to excellent condition.
Baltic and U.S. Dollar Indices
- The Baltic Index decreased to 1709, down from 1723 the week prior.
- The Dollar Index fell to 95.14 this week, down from the one-year high of 96.47 last week.
Source: USW Associates Price Report