May 3, 2019
- Concerns of late planting in the High Plains due to excessive rain supported hard red spring (HRS) futures prices week-over-week while the potential for a strong hard red winter (HRW) harvest in Kansas (see below) pulled HRW futures prices below last week’s close. Technical selling lowered soft red winter (SRW) futures prices for the fourth week in a row. July SRW futures lost 4 cents from last week to close at $4.38/bu and July HRW futures lost 6 cents to close at $4.01/bu. July HRS futures closed up 3 cents over last week at $5.15/bu. CBOT July corn futures gained 9 cents to close at $3.70/bu. CBOT July soybean futures fell 25 cents to end at $8.42/bu.
- Minimal farmer selling rivaled slow export demand out of the Pacific Northwest (PNW), holding HRS and HRW export basis steady week-over-week for May and June deliveries. Soft white export prices increased out of the PNW on limited exportable supply and news of potential moisture damage to the 2019 crop. SRW export basis in the Gulf for nearby and deferred delivery months remains high and steady on continued inland waterway flooding. HRS and HRW export basis for May and June delivery out of the Gulf came down from last week on better rail transportation logistics, reduced export demand and pressure from news of a strong 2019 HRW harvest out of Kansas (see below). Protein premium spreads for HRW out of the Gulf widened over last week on the expectation that higher yields in 2019 could result in lower overall protein levels.
- USDA’s April 29 Crop Progress report rated 64% of U.S. winter wheat in good or excellent condition, up slightly from last week’s 62% and up significantly from the year-over-year estimate of 35%. U.S. spring wheat planting is 13% complete, well below the 5-year average of 33%.
- Every year, participants from across the wheat industry gather in Manhattan, Kansas to estimate yield potential and final production estimates for the state’s HRW crop. Scouts travel around the state assessing environmental and disease conditions affecting the young stands of wheat. This year, wet, cool conditions across the state signal the potential for a high-yielding crop. Average scout estimates peg average yield for the state at 47.2 bu/ acre (3.17 MT/ hectare) and total production at 8.36 MMT, up 26% over last year’s forecast of 6.61 MM.
Read USW’s full recap of the tour here.
_____________________________________________________________________________
Commercial Sales
- Net U.S. wheat sales as of April 25 of 122,000 metric tons (MT) for delivery in 2018/19 were down 75% from last week’s 425,000 MT and 72% from the estimated previous 4-week average. Year-to-date commercial sales of 25.5 million metric tons (MMT) make up 99% 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 30 Drought Monitor, moderate showers dotted the Southern Plains from central Oklahoma to northern Kansas. However, the monitor introduced a region of abnormal dryness to central Kansas, where a significant portion of the country’s HRW is grown. Looking ahead, cooler temperatures, ample rain and snow showers are expected across the Northern Plains and upper Midwest.
_____________________________________________________________________________
- As of April 29, the Ministry of Agrarian Policy and Food of Ukraine reported spring wheat planting at 100% complete. Total 2019 early spring grains planted area is excepted to reach 2.24 million hectares.
- Dmitry Patrushev, Russia’s Minister of Agriculture, declared the country’s 2019 wheat harvest could reach between 75.0 and 78.0 MMT, up slightly from last year’s harvest, if realized, but down significantly from SovEcon, Russia’s agriculture consultancy, previous estimate of 83.4 MMT.
- The European Commission reported that European Union soft wheat (non-durum) exports, as of April 28, are down 2% year-over-year at 16.9 MMT compared to last year’s 17.2 MMT.
_____________________________________________________________________________
Baltic and U.S. Dollar Indices
- The Baltic Dry Index (BDI) continued its ascent this week, closing at 1,032 compared to last week’s 889. This marks the BDI’s highest value since late January 2019.
- The Dollar Index fell slightly week-over-week to 97.48.
Source: U.S. Wheat Associates