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U.S. Wheat Associates Price Report

U.S. Wheat Associates Price Report

January 4, 2019

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  • Soft red winter (SRW), hard red winter (HRW), and hard red spring (HRS) futures fell below end of week values Price Report last reported on Dec. 21, 2018. However, all classes rallied at the end of this week with news that the U.S. will have trade talks with China and reports of potential quality problems in Argentina’s crop due to excessive rain. A weaker U.S. dollar increased gains. CBOT March futures closed 10 cents down from Dec. 21 at $5.11/bu. KCBT ended 6 cents down at $5.03/bu. MGEX lost 3 cents to close at $5.65/bu. CBOT March corn futures closed 4 cents up at $3.80/bu. CBOT January soybean futures closed 6 cents up at $9.00/bu.
  • Limited export demand through the holidays pressured export basis in the Gulf for nearby HRW and HRS delivery months. Export basis for HRS in the Pacific Northwest (PNW) was unchanged for nearby and deferred delivery months on sustained demand, but limited export demand for HRW in the PNW pressured export basis for nearby and deferred delivery months. Export demand is expected to rise in the coming weeks as farmer selling gains momentum in the second half of marketing year 2018/19. 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 will not come out again until the agency’s funding is fully restored at the end of the government shutdown. However, USDA did publish its weekly export inspections for wheat which totaled 376,281 metric tons (MT), nearly 40% higher than the inspection volume reported during the same time last year.

U.S. Drought Monitor

  • The January 4 Drought Monitor reported beneficial storms between the Cascades and northern Rockies, and moderate snowfall in the Dakotas and eastern Montana. Much needed precipitation fell across wheat growing regions in southeastern Colorado, southern Kansas, northern Texas and southern Oklahoma. Looking ahead, “above normal” precipitation is expected across the southern and central Plains, while unusually low precipitation is expected across the northern Plains.

  • The Buenos Aires Grain Exchange, Bolsa de Cereales, reported Argentine wheat harvest is 91% complete, up from 68% complete as of Dec. 21, 2018.
  • 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 exports will fall to a 10-year low of 10.6 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 fell to 1,267, a slight downturn from its closing value on Dec. 21.
  • The Dollar Index decreased slightly from its closing value on Dec. 21 to 96.19.

Source: U.S. Wheat Associates