February 8, 2019
- U.S. wheat futures were mixed for the week as traders waited for key crop reports that squared mostly with trade expectations. Futures closed higher on Friday as U.S. export demand strengthened and the government reports put winter wheat planted area at a 110-year low. Prices were down from the previous week on news that the Chinese-U.S. trade dispute will not be resolved before a Mar. 1 deadline threatening increased U.S. tariffs on Chinese goods. March SRW futures rose 4 cents today closing at $5.17/bu, but overall experienced its first weekly decline in three weeks. HRW futures lost two cents closing at $4.94/bu, and HRS rose 4 cents to $5.68/bu. CBOT March corn futures were down 2 cents at $3.74/bu. CBOT March soybean futures were up 3 cents at $9.16/bu.
- Softening freight rates across the board coupled with price hikes in the Russian domestic market have made U.S. wheat competitive in Egyptian tenders the last few weeks. Egypt purchased 120,000 MT of U.S. SRW, French and Ukrainian wheat but no Russian wheat this week.
- USDA adjusted U.S. wheat ending stocks up to 27.5 MMT on lower domestic consumption. U.S. exports were unchanged at 27.2 MMT even though export sales are not yet keeping pace. Global trade was raised by 1.3 MMT. Major wheat exporters Australia and Argentina both had their export projection lowered. Global use for 2018/19 was raised to 2.0 MMT, and global use is predicted higher than supply leaving world ending stocks at 267.5 MMT.
- Weather patterns across much of the United States were unremarkable this week with areas of dryness and drought little changed. While recent precipitation in the Great Plains was sufficient to remove areas of drought that remained in northeastern North Dakota, areas of northeastern Colorado and Nebraska continue to experience unprecedented dryness, having received only 10 to 30 percent of usual precipitation. East of the Rockies to the Atlantic Coast, no severe drought exists. Over the coming week, large storms are expected to bring heavy rain and snow to a large swath of the eastern Great Plains and Ohio Valley. Only areas of high elevation are expected to receive significant moisture in central Idaho and northeastern Oregon. Dry conditions will remain for Great Basin and High Plains areas with moderate moisture at best.
Baltic and U.S. Dollar Indices
- The Baltic Index continues its slide hitting its lowest level since June 2016 closing at 610
- The Dollar Index was up from last week at 96.62, compared to last week’s 95.57.
Source: U.S. Wheat Associates