July 26, 2019
- All wheat futures prices fell week-over-week on technical selling and spillover pressure from lower end-of-week corn and soybean futures prices. Soft red winter (SRW) September futures lost 6 cents from last week to close at $4.96/bu and hard red winter (HRW) futures lost 8 cents to end at $4.32/bu. Hard red spring September futures lost 5 cents to close at $5.42/bu. CBOT September corn futures fell 16 cents to end at $4.14/bu. CBOT August soybean futures fell 18 cents to close at $8.83/bu.
- Minimal farmer selling supported Gulf HRS and SRW export basis this week. Increased export and domestic demand boosted Gulf HRW export basis for July and August deliveries. Limited export demand offset minimal farmer selling out of the Pacific Northwest (PNW), holding HRS and HRW export basis and soft white wheat (SW) export prices steady week-over-week for nearby and deferred deliveries.
- On July 22, USDA reported U.S. winter wheat harvest at 69% complete 79% last year which is also the 5-year average. U.S. spring wheat is 92% headed compared to 96% in 2018 and the 5-year average of 94%. USDA reported 76% of U.S. spring wheat in good to excellent condition, in line with last week and 2018 levels.
- The Wheat Quality Council (WQC) this week held its annual HRS tour to estimate yield potential for North Dakota and parts of surrounding states. Scouts travelled around the state on different routes estimating yield and analyzing environmental and disease conditions that may affect North Dakota’s wheat crop. This year, cool spring weather and beneficial spring and summer precipitation across the state signal the potential for a high-yielding crop. Average scout estimates peg North Dakota’s HRS yield at 43.1 bu/acre (2.90 MT/hectare), up 5% from the tour’s 2018 estimate of 41.1 bu/acre (2.76 MT/hectare).
- For more information on the HRS tour, visit the WQC website at https://wheatqualitycouncil.org. Highlights and photos from the tour are posted on Facebook and Twitter using #wheattour2019. You can read the U.S. Wheat Associates (USW) HRS tour Wheat Letter here.
- Net U.S. wheat sales as of July 18 of 660,000 metric tons (MT) for delivery in 2019/20 were 90% higher than last week’s 347,000 MT and well above trade expectations of 200,000 to 450,000 MT. Year-to-date commercial sales of 8.12 million metric tons (MMT) are 25% 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.
- For the week ending on July 23, Drought Monitor reported scattered thunderstorms with heavy rain across much of the Northern Plains diminished areas under abnormal and severe dryness in north central North Dakota. Looking ahead, moderate precipitation is expected from southwestern Montana to northern Minnesota. Below-normal rainfall is forecast throughout the High and Southern Plains.
- On July 26, SovEcon, a Russian agriculture consultancy, sharply cut its Russian 2019/20 wheat exports forecast from 37.6 MMT to 31.4 MMT. If realized, 2019/20 Russian exports would fall 15% from last year’s 36.0 MMT. However, Russian export prices showed little change with this new market information. On July 17, Egypt purchased 60,000 MT of Russian wheat at $201/MT. On July 23, Egypt purchased 60,000 MT of Russian wheat at $202/MT.
- According to the Ukrainian Ministry of Agriculture, the 2019/20 Ukrainian early grains harvest is now 76% complete at 7.4 million hectares harvested (18.3 million acres). So far, Ukrainian farmers have harvested 19.7 MMT of winter wheat.
- Following reduced 2019/20 wheat production forecasts in Russia, the European Union (EU) and Canada, the International Grains Council (IGC) reduced its 2019/20 global wheat production estimate by 6 MMT to 763 MMT. USDA predicts 2019/20 world wheat production will total 771 MMT, significantly higher than its 2018/19 estimate of 731 MMT.
Baltic and U.S. Dollar Indices
- The Baltic Dry Index fell 16% week-over-week to end at 1,947.
- The U.S Dollar Index climbed from last week’s 97.12 to close at 98.00.
Source: U.S. Wheat Associates