March 8, 2019
- Wheat futures took another hit this week on technical selling, reduced export demand for U.S. supplies, and increased prospects for competitor harvests later in the year (see below). The markets rallied slightly between Thursday and Friday, but not enough to claw ahead of last week’s close. A stronger U.S. dollar enhanced losses. March soft red winter (SRW) futures lost 21 cents to end at $4.33/bu and March hard red winter (HRW) futures lost 16 cents to close at $4.25/bu. Hard red spring (HRS) futures fell 6 cents to close at $5.56/bu. CBOT March corn futures lost 9 cents to close at $3.55/bu. CBOT March soybean futures fell 15 cents to close at $8.84/bu.
- Extreme winter weather inhibited grain shipments by rail and barge this week. Snow storms, bitter cold, and high inland water levels hoisted export basis for nearly all classes of wheat out of the Pacific Northwest (PNW) and the Gulf for nearby and deferred delivery months. Traders believe transportation concerns could persist and continue affecting export basis for nearby deliveries in the coming weeks. The Great Lakes – St. Lawrence Seaway System closed on Dec. 31, 2018 and will re-open in March 2019. The Columbia-Snake River System will be closed for annual, planned maintenance March 2 to 24, 2019.
- In its March World Agricultural Supply and Demand Estimates report, USDA lowered its 2018/19 U.S. wheat export estimate to 26.2 million metric tons (MMT), down 3 percent from the February estimate of 27.2 MMT. USDA dropped expected hard red spring exports by 680,000 metric tons (MT) to 7.48 MMT and white (soft white and hard white) exports by 272,000 MT to 5.72 MMT.
- This week, net export sales of 621,700 metric tons (MT) were reported for delivery in 2018/19, up 30 percent from last week’s 476,000 MT and 9 percent above the previous 4-week average of 569,000 MT.
- Year-to-date commercial sales of 22.6 MMT comprise 85 percent of the USDA’s new 2018/19 export figure.
- Click here to view the most recent USW Commercial Sales report.
- The March 7 Drought Monitor reported extremely low temperatures and moderate to deep snowpack for most of the High Plains and parts of the Midwest. Heavy snow will fall again next week between the central High Plains and the Great Lakes region, adding pressure to grain transportation systems already delayed by last week’s storms. Looking forward, a series of Pacific storms will pass eastward across the PNW blanketing fresh snow from the Cascades to the Rocky Mountains. Moderate to heavy precipitation is expected across the Southern Plains into the lower Ohio Valley.
- The Russian Ministry of Agriculture estimated 2019 total wheat output at 75.0 to 78.0 MMT but suggested production could hit as much as 80 MMT with continued favorable weather conditions.
- The Ukrainian Agriculture Ministry expects another strong grain harvest in 2019 thanks to favorable weather conditions and increased planted area for winter grains, of which 19 million acres (7.6 million hectares) are dedicated to winter wheat.
Baltic and U.S. Dollar Indices
- The Baltic Dy Index (BDI) dipped slightly week over week to end at 657.
- The Dollar Index closed up week over week at 97.37, compared to last week’s 96.54.
Source: U.S. Wheat Associates