August 16, 2019
- USDA’s larger-than-expected U.S. corn production forecast in its August World Agriculture Supply and Demand Estimates (WASDE) report pressured corn, soybean, and all wheat futures prices week-over-week. Soft red winter (SRW) September futures lost 29 cents to close at $4.71/bu and hard red winter (HRW) futures lost 23 cents to end at $3.94/bu. Hard red spring (HRS) September futures fell 13 cents to close at $5.06/bu. CBOT corn futures lost 39 cents to end at $3.71/bu. CBOT soybean futures fell 12 cents to close at $8.67/bu.
- Low futures prices and minimal farmer selling supported HRW export basis out of the Gulf and export basis for HRS and HRW out of the Pacific Northwest (PNW) for September and October deliveries. Increased farmer selling pressured Gulf HRS export basis for nearby and deferred deliveries.
- On August 12, USDA reported winter wheat harvest at 89% complete compared to 93% last year and the 5-year average of 96%. Winter wheat harvest in Idaho and Washington, where most of the country’s soft white (SW) wheat is grown, is significantly behind the normal harvest cadence. U.S. spring wheat harvest is 8% complete compared to 32% last year and the 5-year average of 30%. USDA reported 69% of U.S. spring wheat in good to excellent condition, compared to last week’s 73%.
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Commercial Sales
- Net U.S. wheat sales as of August 8 of 462,000 metric tons (MT) for delivery in 2019/20 were 5% lower than last week’s 488,000 MT but in line with trade expectations of 200,000 to 500,000 MT. Year-to-date commercial sales of 9.85 million metric tons (MMT) are 18% ahead of last year’s pace. USDA currently forecasts 2019/20 U.S. wheat exports will total 26.5 MMT, 4% higher than 2018/19, if realized.
- Click here to view the most recent USW Commercial Sales report.
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- For the week ending August 15, the U.S. Drought Monitor reported heavy rains across the Great Plains from the Texas Panhandle through parts of central and eastern Kansas into central North and South Dakota. Dryness and moderate drought were reported in southern Kansas, eastern Nebraska and northern North Dakota. Looking ahead, heavy rainfall is expected across the central Great Plains and into the Midwest.
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- According to Russia’s Ministry of Agriculture, Russia’s total grains harvest is 38% complete at 60.5 MMT. Russia’s 2019/20 wheat harvest now totals 49.8 MMT. On August 12, IKAR, a Russia agriculture consultancy, cut its Russian wheat production forecast from 75.5 MMT to 70.0 MMT. USDA also reduced its Russian wheat production forecast from 74.2 MMT in its July WASDE report to 73.0 MMT in its August WASDE report.
- On August 13, Ukraine’s Agriculture Ministry reported the country’s wheat harvest stands at 27.9 MMT or 98% complete. Ukraine’s total 2019 grains harvest is expected to reach 70.0 MMT, in line with 2018/19 levels, if realized.
- DRV, Germany’s association of farmer cooperatives, expects the country’s 2019/20 wheat harvest to reach 23.8 MMT, 18% higher than 2018/19 levels despite an early summer heatwave that stressed certain crops. Germany’s total 2019 grains harvest is expected to reach 46.2 MMT, 22% higher than last year, if realized.
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Baltic and U.S. Dollar Indices
- The Baltic Dry Index rose 17% from last week to end at 2,047.
- U.S. Dollar Index climbed from last week’s 97.47 to close at 98.15.
Source: U.S. Wheat Associates