September 21, 2018
- U.S. wheat futures ended the week up supported by weakening in the U.S. dollar, improved U.S. exports and harvest delays in Canada. CBOT December wheat futures ended the week about 10 cents up at $5.22/bu, KCBT added 9 cents to $5.25/bu and MGEX gained 16 cents to $5.89/bu. CBOT December corn rose 5 cents to $3.57/bu and CBOT January soybeans added 17 cents to $8.61/bu.
- Ahead of the fall row crop harvest, nearby export basis softened slightly as exporters tried to fill out their October export program. U.S. export basis remained steady this week for Gulf contracts as slow farmer and commercial warehouse selling continues to offset weaker export demand. With the typical fall Pacific Northwest (PNW) soybean program nowhere to be found, PNW export basis softened due to increased export capacity and decreased freight costs.
- Due to increased demand for higher protein SW and the low average protein levels of the 2018/19 crop, the USW Price Report now shows a min 9.5% protein premiums (currently about a 20 cent per bushel premium to max 10.5% SW prices) and no longer shows an unspecified protein level. Unspecified protein SW has priced equal to max 10.5% SW for the last several months. USW will continue to monitor market conditions and make changes to the report as necessary.
- USDA’s weekly Export Sales Report included net wheat sales of 468,400 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 10.2 million metric tons (MMT), 22% behind last year’s year-to-date total of 13.1 MMT. USDA expects 2018/19 U.S. wheat exports to reach 27.9 MMT.
- On September 17, USDA reported U.S. spring wheat harvest is 97% complete, ahead of the 5-year average pace of 92%. U.S. winter wheat planting is 13% complete, slightly behind the 5-year average of 14%.
- The September 20 U.S. Drought Monitor noted that while tropical storms brought heavy rain and flooding to the U.S. Southeast, East Coast and Gulf regions, the U.S. Northern Plains and Pacific Northwest (PNW) received very little to no rain causing drought conditions to expand and worsen. Parts of North Dakota have received less than 20% of the normal precipitation over the past 90 days. The current forecast expects another round of storms across the U.S. Southern Plains, providing additional relief to drought-stricken areas, but potentially delaying fall planting.
- Harvest in Canada’s western provinces were delayed by cool, wet weather. The Saskatchewan weekly crop report noted snow was reported in the northwest regions of the province. Winter wheat harvest there is 99%, up just one percentage point week over week; durum harvest is 78% complete, up from 73% last week; and spring wheat harvest is 50% complete, up from 46%. In Alberta, spring wheat harvest is 31% complete, significantly behind last year’s pace.
- Bolsa de Cereales, the Buenos Aires Grain Exchange, reported 42% of wheat acres had below normal or poor soil moisture. The worst conditions were found in northwestern areas of Argentina. Bolsa noted that additional rain will be needed soon to prevent deterioration in yield potential.
Baltic and U.S. Dollar Indices
- The Baltic Index increased to 1396, up from 1366 the week prior.
- The Dollar Index fell to 93.96 this week, down slightly from 94.93 last week.
Source: U.S. Wheat Associates