July 19, 2019
- Technical selling and strong progress into the U.S. winter wheat harvest pressured all wheat futures prices week-over-week. A stronger U.S. dollar added to losses. Soft red winter (SRW) September futures fell 20 cents from last week to close at $5.02/bu and hard red winter (HRW) September futures lost 27 cents to end at $4.40/bu. Hard red spring (HRS) September futures lost 13 cents to close at $5.29/bu. CBOT September corn futures slipped 23 cents to end at $4.31/bu. CBOT August soybean futures lost 12 cents to close at $9.01/bu.
- Increased farmer selling and limited export demand pressured HRS and HRW export basis out of the Gulf for August and September deliveries. Gulf HRW protein premium spreads narrowed this week on news of higher than anticipated protein levels in the 2019/20 HRW harvest. Minimal export demand offset limited farmer selling in the Pacific Northwest (PNW) pushed HRS and HRW export basis lower for nearby and deferred deliveries. PNW HRS protein premiums widened this week on increased expectations of a lower protein harvest.
- On July 15, USDA reported U.S. winter wheat harvest at 57% complete compared to last year’s 72% and the 5-year average of 71%. U.S. spring wheat is only 78% headed compared to 91% last year and the 5-year average of 87%. USDA reported 76% of U.S. spring wheat in good to excellent condition, down slightly from last week’s 78%.
- Net U.S. wheat sales as of July 11 of 347,000 metric tons (MT) for delivery in 2019/20 were 22% higher than last week’s 284,000 MT and in line with trade expectations of 200,000 to 400,000 MT. Year-to-date commercial sales of 7.86 million metric tons (MMT) are 22% ahead of last year’s pace. USDA forecasts 2019/20 U.S. wheat exports will total 25.9 MMT, 6% higher than 2018/19 if realized.
- Click here to view the most recent USW Commercial Sales report.
- According to the July 16 Drought Monitor, moderate to heavy rainfall alleviated abnormally dry areas across northern North Dakota and northern Minnesota, where much of the country’s HRS is grown. Warm, dry weather spread across most of the Southern Plains and Midwest. Looking ahead, heavy rainfall is expected in the upper Midwest while hot, dry conditions are forecast across the Northern Plains.
- By July 18, according to Russia’s Ministry of Agriculture, farmers harvested 30.8 MMT of wheat over 8.2 million hectares (20.3 million acres) averaging 3.75 MT/hectare (55.8 bu/acre). IKAR, a Russian agriculture consultancy, reduced its 2019/20 wheat production forecast from 78.5 MMT to 77.5 MMT on hot, dry weather conditions. Last year, Russia harvested 72.0 MMT of wheat.
- According to the Ukrainian Ministry of Agriculture, the 2019/20 Ukrainian early grains harvest is 52% complete at 5.10 million hectares harvested (12.6 million acres). So far, Ukrainian farmers have harvested 12.0 MMT of winter wheat.
- Germany’s Association of Farm Cooperatives predicts the country’s 2019/20 wheat harvest will reach 23.9 MMT, 18% higher than in 2018/19 but slightly lower than last month’s estimate of 24.7 MMT due to a heatwave from late June to early July.
Baltic and U.S. Dollar Indices
- The Baltic Dry Index (BDI) climbed 14% over last week to end at 2,310. This marks the BDI’s highest level in more than 5 years.
- The U.S. Dollar Index rose from last week’s 96.81 to close at 97.12.
Source: U.S. Wheat Associates