Friday, December 14, 2018
Note to Readers: There will be no USW Price Report on December 28, 2018.
- Hard red winter (HRW) and hard red spring (HRS) futures are up from last week, supported by strong export demand for both classes. A strong U.S. dollar limited gains. CBOT March wheat futures closed 1 cent down at $5.30/bu. KCBT ended 6 cents up at $5.18/bu. MGEX added 3 cents to close at $5.84/bu. CBOT March corn futures closed 1 cent down at $3.85/bu. CBOT January soybean futures closed 16 cents down at $9.00/bu.
- Increased export demand for high protein wheat increased protein premiums for HRW week over week. The recent futures rally encouraged increased farmer selling, which pressured export basis for both nearby and deferred Pacific Northwest HRW delivery months. Nearby export basis is supported by limited export elevation capacity. The Great Lakes – St. Lawrence Seaway System will close for the season on December 31, 2018 and will re-open in March 2018.
- USDA’s weekly Export Sales Report included net wheat sales of 754,100 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 16.4 million metric tons (MMT), 10% behind last year’s year-to-date total of 18.1 MMT. USDA expects 2018/19 U.S. wheat exports to reach 27.2 MMT.
- In its monthly World Agricultural Supply and Demand Estimates (WASDE), USDA forecast 2018/19 world wheat production at 1,013 MMT, down 1% from 2017/18. Global trade drops slightly to 177 MMT but still floats above the 5-year average by 5 percent. Global consumption will set a fifth consecutive record at 744 MMT. World ending stocks will fall to 267 MMT, down 4% year over year if realized. U.S. production totaled 51.3 MMT, 8% above 2017/18.
- The December 13 Drought Monitor reported moderate precipitation in parts of the Pacific Northwest (PNW). Despite the much-needed rainfall, wheat producing regions in the PNW remain moderately to severely dry. The map shows good moisture for most of the Plains and eastern SRW production regions with spots of dryness in eastern Oklahoma and northern North Dakota. While abnormally dry conditions improved in north-central Montana, moderate to severe drought continues to plague eastern Colorado. Looking forward, the forecast predicts windy conditions and moderate to heavy precipitation to spread across the Southern Plains later next week.
- The Buenos Aires Grain Exchange, Bolsa de Cereales, reported Argentine wheat harvest is 58% complete, up from 44% complete last week.
- The European Commission raised its 2018/19 European Union (EU) common wheat production estimate by 1.80 MMT to 129 MMT. However, the Commission’s 2018/19 EU common wheat export estimate remained unchanged at 20.0 MMT.
- 2018/19 Australian wheat production will fall to a 10-year low of 17.0 MMT due to drought according to ABARES data.
- Statscan reported Canadian total wheat harvest expected to reach 31.8 MMT, up 6% year over year.
Baltic and U.S. Dollar Indices
- The Baltic Index continued its upward climb to 1,365, up 2% week over week.
- The Dollar Index increased slightly to 97.45, up 1% from last week.
Source: U.S. Wheat Associates