Price Report-September 6, 2019
- Wheat futures were little moved after a quiet and relatively uneventful week. Strong competition for global export business has wheat markets in the U.S. under pressure with prices little changed from a week ago. Soft red winter (SRW) December futures were up 1 cent to close at $4.63/bu and hard red winter (HRW) futures fell 4 cents to end at $3.93/bu. Hard red spring (HRS) December futures lost 3 cents to close at $4.94/bu. CBOT December corn lost 12 cents to end at $3.58/bu. CBOT January soybean futures fell 7 cents to close at $8.75/bu.
- The week saw little change to prices over all with farm selling still limited. Dry conditions in both Australia and Argentina relieved some pressure from large global supply but plentiful global supplies are still pressuring prices. A weakened dollar in theory made US grains more competitive but export sells were still below expectations.
- On September 3, the USDA reported the spring wheat harvest at 55% complete, well behind last year’s average of 86% and behind the 5-year average of 78%. The USDA reported the spring wheat harvest at 67% good to excellent, falling behind last week’s average of 69% and behind last year’s average of 74%.
- Net U.S. wheat sales as of August 29 of 312,000 metric tons (MT) for delivery in 2019/20 were 53% lower than last week’s 661,000 MT and below trade expectations of 400,000 to 800,000 MT. Year-to-date commercial sales of 11.4 million metric tons (MMT) are 22% ahead of last year’s pace. USDA currently forecasts 2019/20 U.S. wheat exports will total 26.5 MMT, 4% more than 2018/19, if realized.
- Click here to view the most recent USW Commercial Sales report.
- Bolsa de Cereales, the Buenos Aires grain exchange, reported that arid conditions across much of the country have delayed the development of the country’s wheat crop. According to the agriculture ministry, harvest begins in November and rain is crucial at this stage. The ministry reports the world’s sixth largest wheat exporter is projected to harvest 21 MMT of wheat with plantings complete on 6.6 million hectares (16.3 million acres).
- The president of Brazil’s wheat industry group, Abitrigo, said that Brazil will start importing a tariff-free quota of 750,000 MT of wheat per year from outside the Mercosur trading bloc starting in 2020. There is no official word from the Brazilian government about implementing the TRQ however Brazil has imported 3.9 MMT of wheat this year mostly from its neighbor Argentina who, as a Mercosur member is able to export wheat to Brazil tariff free.
- As a third straight year of drought in Australia continues, forecasts for the wheat crop have shriveled by 10% with forecasters warning that production could drop below 19.0 MMT. Australia’s ranking as a world wheat exporter has dropped to seventh from third in 2016/17. This week, U.S. Wheat Associates Market Analyst Claire Hutchins provided an in-depth look at the impact of the drought on Australian production and exports. Read the story here: http://bit.ly/2kfDOpX.
Baltic and U.S. Dollar Indices
- The Baltic Dry Index gained 222 points over last week to end at 2,499.
- The U.S. dollar Index was little changed at 98.36, slightly lower than the 98.47 closing from last week.
Source: U.S. Wheat Associates