May 10, 2019
- The week ended with no trade deal between China and the United States and an additional $200 billion worth of tariffs on Chinese imports. The U.S. Secretary of Agriculture stated in a tweet President Trump’s steadfast support promising new aid to protect U.S. farmers. July soft red winter (SRW) futures fell 14 cents to close at $4.24/bu after first hitting its lowest contract price since January 2018 and declining for a fifth straight week. Hard red winter (HRW) wheat lowered 14 cents, closing at $3.87/bu, while hard red spring (HRS) gained two cents, closing at $5.17/bu. CBOT July corn futures fell 19 cents to close at $3.51. CBOT July soybean futures fell 33 cents to end at $8.09/bu.
- High river waters and slow farmer sales due to unfavorable market conditions strengthened HRS export basis out of the Gulf for May delivery. HRW and SRW export basis for nearby delivery and deferred delivery out of the Gulf remained steady and high on difficult transportation logistics and reduced farmer selling.
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Commercial Sales
- Net U.S. wheat sales as of May 2 of 90,600 metric tons (MT) for delivery in 2018/19 were down 26% from last week’s 122,000 MT and 68% from the estimated previous 4-week average. Year-to-date commercial sales of 25.6 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 412,000 MT for delivery in 2019/20.
- Click here to view the most recent USW Commercial Sales report.
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- Much of the United States remains free of drought or abnormal dryness this week. A few pockets of abnormal dryness exist in the Oklahoma and Texas Panhandles and at the borders separating Colorado, Nebraska and Kansas. Western Washington is experiencing moderate drought conditions while long-term drought improved in western North Dakota. Kansas remains wet with some flooding in the south-central part of the state. High water along the Mississippi and Illinois Rivers has restricted barge traffic as well as unloading and loading at the Gulf Coast. Conditions will remain the same for much of the United States with continued dryness in the Northwest and some rainfall across the Midwest. Heavy rain forecasts for southeast Texas and Louisiana may continue to restrict loading on ocean-going vessels out of the gulf.
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- Major wheat exporters are expecting higher production in 2019/20. The European Union is expected to produce 153.8 MMT following improved weather conditions. Russia is likely to experience its second-largest crop on record. Following abundant rainfall in much of the Middle East, Iraq and other countries are expected to have record output of their own.
- Ukraine’s grain exports have reached 43.5 MMT for the 2018/19 season, almost 10.0 MMT more than at this time a year ago. Wheat exports have reached 14.5 MMT.
- Russia’s Ministry of Agriculture reports that 46.7 million acres of spring grains have been planted including 6.17 million acres of spring wheat. Year-to-date, Russia has planted 5.8 million acres more this year than last and expects to harvest as much as 83.4 MMT in 2019/20.
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Baltic and U.S. Dollar Indices
- The Baltic Dry Index closed at 1,013, slightly lower from where it closed a week ago.
- The Dollar Index stayed nearly the same from last week closing at 97.3.
Source: U.S. Wheat Associates