September 7, 2018
- U.S. wheat futures fell to a 7-week low this week after Russia announced it would not limit wheat exports following the second meeting with its grain trade in two weeks. A weaker U.S. dollar provided limited support. CBOT September wheat decreased 33 cents each to $4.86/bu, KCBT lost 34 cents to close at $4.88/bu and MGEX fell 28 cents to $5.55/bu. CBOT September corn added 3 cents to close at $3.54/bu and CBOT September soybeans dropped 1 cent to $8.32/bu.
- In the Gulf tributary areas, increased farmer selling and weaker barge freight pressured nearby export basis lower as the market tries to free up storage space for corn and soybeans. In the Pacific Northwest (PNW), export basis weakened for October and November due to a lack of elevation and freight competition from soybean exports. PNW traders noted that minimum protein specifications for soft white (SW) now garner a premium due to the low average protein levels of this year’s crop.
- USDA’s weekly Export Sales Report included net wheat sales of 379,800 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 9.35 million metric tons (MMT), 25% behind last year’s year-to-date total of 12.5 MMT. USDA expects 2018/19 U.S. wheat exports to reach 27.9 MMT.
- On August 27, USDA reported U.S. spring wheat harvest is 87% complete, ahead of the 5-year average pace of 75%.
- The September 6 U.S. Drought Monitor noted heavy rain fell across eastern Kansas and southeastern Nebraska, boosting soil moisture ahead of fall planting. Little to no rain fell across the U.S. Northern Plains and Pacific Northwest (PNW), allowing harvest to progress quickly but worsening drought conditions. The current forecast expects rain to fall across the United States, providing welcome relief to drought-stricken areas and replenishing depleted soil moisture ahead of fall planting
- According to Reuters, Western Australia received beneficial moisture throughout August that boosted yield potential. This contrasts with the devastating drought in Queensland and New South Wales that has hurt yield potential significantly. Western Australia the country’s biggest wheat exporting state.
- The Saskatchewan weekly crop report noted winter wheat harvest is 92% complete, up from last week’s 78% complete. Durum harvest is 49% complete, and spring wheat harvest is 28% complete. In Alberta, spring wheat harvest is 13% complete, behind the 5-year average pace.
- Bolsa de Cereales, the Buenos Aires Grain Exchange, rated 81% of Argentine wheat in normal to excellent condition, down from 85% normal to excellent last week.
- The Argentine government imposed an export duty of 4 pesos per dollar on wheat and corn exports on September 3.
Baltic and U.S. Dollar Indices
- The Baltic Index decreased to 1484, down from 1579 the week prior.
- The Dollar Index fell to 94.92 this week, down slightly from 95.14 last week.
Source: U.S. Wheat Associates