June 28, 2019
- U.S. wheat future prices ended mixed this week on technical selling, expectations of much needed warmer, dryer weather for the winter wheat harvest and lower than expected spring wheat planted area according to USDA’s June Acreage report (see below). Soft red winter (SRW) September futures fell 3 cents from last week to close at $5.27/bu and hard red winter (HRW) September futures lost 3 cents to end at $4.61/bu. Hard red spring (HRS) July futures gained 10 cents week-over-week to close at $5.54/bu. CBOT September corn futures lost 23 cents to close at $4.25/bu. CBOT August soybean futures lost 4 cents to end at $9.11/bu.
- Limited export demand pressured Pacific Northwest (PNW) HRS export basis for July and August deliveries. Minimal farmer selling offset limited export demand for HRW and soft white wheat out of the PNW, holding export basis and export prices constant week-over-week. Limited elevation capacity kept Gulf HRS and HRW export basis steady and high July deliveries. Delayed harvest conditions for HRW elevated Gulf export basis for August deliveries. Limited export demand and more inland barge movement due to reduced flooding on the Mississippi River and its tributaries pressured SRW export basis for nearby and deferred deliveries out of the Gulf.
- In its June Acreage report, USDA reduced its estimate of all wheat planted area from 45.8 million acres in March to 45.6 million acres. Winter wheat planted area increased from the March estimate of 31.5 million acres to 31.8 million acres in June. Spring wheat planted area dropped 3% from the March estimate to 12.4 million acres and durum planted area fell from 1.42 million acres in March to 1.40 million acres in June.
- USDA’s June 24 Crop Progress report rated 61% of U.S. winter wheat in good or excellent condition, up significantly from last year’s 37%. U.S. winter wheat harvest is only 15% complete compared to 39% last year and the 5-year average of 34%. U.S. spring wheat is 7% headed compared to 30% last year and the 5-year average of 29%. USDA reported 75% of U.S. spring wheat in good to excellent condition, down slightly from last week’s 77%.
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Commercial Sales
- Net U.S. wheat sales as of June 20 of 612,000 metric tons (MT) for delivery in 2019/20 were more than triple last week’s 188,000 MT and exceeded trade expectations of 200,000 MT to 500,000 MT. Year-to-date commercial sales of 6.95 million metric tons (MMT) are 25% ahead of last year’s pace. USDA expects 2019/20 exports to total 24.5 MMT.
- Click here to view the most recent USW Commercial Sales report.
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- The June 25 Drought Monitor reported excessively wet conditions across the Mississippi River Valley and the Ohio River Valley, though inland grain transportation logistics were less burdened than they have been for weeks. Beneficial rainfall alleviated areas under moderate to severe drought across HRS and durum producing regions in northern Montana and northern North Dakota. Looking ahead, warmer temperatures are expected from the Great Plains to the Midwest. Heavy rainfall is expected in the northern Great Plains and the upper Mississippi River Valley.
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- The Buenos Aires Grains Exchange increased its forecast for 2019/20 wheat planted acres from 6.4 million hectares (15.8 million acres) to 6.6 million hectares (16.3 million acres) on high prices and beneficial rains.
- Agritel, a European agriculture consultancy, expects Russian 2019/20 winter wheat yields to jump 11% over last year to 4.03 MT/hectare (60.0 bu/acre). Spring wheat yields are expected to fall slightly below 2018/19 levels to 1.67 MT/hectare (24.8 bu/acre).
- According to Reuters, Ukrainian farmers have harvested 496,000 MT of wheat so far in 2019. This year’s total grain harvest is expected to exceed last year’s record 70.0 MMT.
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Baltic and U.S. Dollar Indices
- The Baltic Dry Index (BDI) jumped 12% week-over-week to end at 1,340. This marks the BDI’s highest value since mid-December 2018.
- The U.S. Dollar Index fell to 96.16 from last week’s 96.22.
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- In observance of the U.S. holiday on July 4, the U.S. Wheat Associates office will be closed July 4 and 5. Next week’s Price Report will be released on Tuesday, July 2.
Source: U.S. Wheat Associates