April 26, 2019
- Abundant global supplies of old-crop wheat, beneficial new-crop growing conditions in the Northern Hemisphere and a strong U.S. dollar (see below) pressured all U.S. wheat futures prices week-over-week. May soft red winter (SRW) futures lost 9 cents from last week to close at $4.35/bu and hard red winter (HRW) futures lost 20 cents to end at $4.00/bu. May hard red spring (HRS) futures fell 25 cents from last week to close at $4.98/bu. CBOT May corn futures lost 7 cents to close at $3.51/bu. CBOT May soybean futures fell 27 cents to end at $8.54/bu.
- The long Easter holiday led to a quiet week for the U.S. grain trading industry. Out of the Gulf, HRS export basis for May and June delivery fell week-over-week on clear inland logistics and light export demand. Limited farmer selling in the Pacific Northwest (PNW) outweighed slow export demand to support HRS basis for nearby and deferred delivery months. HRW export basis and soft white wheat export prices for May and June delivery out of the PNW both fell on reduced export demand.
- USDA’s April 22 Crop Progress report rated 62% of U.S. winter wheat in good or excellent condition, up 2% from last week and well above last year’s estimate of 31% at the same time. U.S. spring wheat planting is 5% complete, well below the 5-year average of 22%.
- The Wheat Quality Council’s Hard Winter Wheat Tour starts on Monday, April 29. Follow the tour on Twitter using #WheatTour19.
_______________________________________________________________
Commercial Sales
- Net commercial U.S. wheat sales as of April 18 of 425,000 metric tons (MT) for delivery in 2018/19 were up 34% from last week’s 318,000 MT but down 4% from the estimated previous 4-week average. Year-to-date commercial sales of 25.3 million metric tons (MMT) make up 98% of USDA’s expected 2018/19 export volume of 25.7 MMT.
- In addition to net and total commercial sales for 2018/19 delivery, USDA also reported net sales of 226,000 MT for delivery in 2019/20.
- Click here to view the most recent USW Commercial Sales report.
_______________________________________________________________
- According to the April 23 Drought Monitor, heavy rains fell across parts of the Southern Plains easing dry conditions in the Texas and Oklahoma Panhandles while light to moderate precipitation spread across the High and Northern Plains. Central Kansas remains somewhat dry but not abnormally so. More rain is forecast for SRW production in the South-Central U.S. and cooler than average temperatures are forecast across most of the country’s wheat-growing regions.
_______________________________________________________________
- USDA estimates Chinese wheat production to increase slightly in 2019 to 131 MMT as higher yields could offset decreased planted area. China’s 2019/20 ending stocks are forecast to jump nearly 10% from 2018/19 to 150 MMT on reduced domestic demand, a volume that is about 50% of estimated world ending stocks.
- Ukraine’s Agriculture Ministry reported spring wheat sowing at 154,000 hectares as of April 22, 92% of the final forecast for 2019.
- Statistics Canada estimates 2019 non-durum spring wheat planted area will jump 12% from last year to 7.85 million hectares. Durum planted area is forecast to fall 19% from 2018 to 2.03 million hectares. All Canadian wheat planted area for 2019 harvest, including winter wheat, will reach 10.4 million hectares, 4% above last year and 7% above the 5-year average of 9.76 million hectares.
- Stratégie Grains expects the 2019/20 European Union durum harvest to fall to 7.89 MMT, the region’s lowest output since 2014/15, on reduced planted area and abnormally dry conditions in France, Italy and Spain.
_______________________________________________________________
Baltic and U.S. Dollar Indices
- The Baltic Dry Index jumped 10% from last week to end at 869, its highest closing value since late January.
- The Dollar Index increased significantly from last week to close at 98, its highest value since May 2017.
Source: U.S. Wheat Associates