September 20, 2019
- All wheat futures contracts climbed week-over-week on technical buying and short covering. Soft red winter (SRW) December futures gained a penny to close at $4.84/bu and hard red winter (HRW) December futures gained 8 cents to end at $4.07/bu. Hard red spring (HRS) December futures gained 19 cents over last week to close at $5.24/bu. CBOT December corn futures gained 2 cents to end at $3.71. CBOT January soybean futures lost 16 cents to close at $8.96/bu.
- Crop quality concerns due to rain on unharvested fields increased HRS export basis out of the Pacific Northwest (PNW) and Gulf for October and November deliveries. Minimal farmer selling supported PNW and Gulf export basis for nearby and deferred deliveries. News of a USDA tender for 110,000 metric tons (MT) of white wheat for shipment to Yemen kept soft white (SW) export prices steady and high week-over-week.
- On September 16, USDA reported spring wheat harvest at 76% complete compared to 96% last year and the 5-year average of 93%. Very little of the remaining area was harvested this week and more rain is in the short-term forecast. U.S. winter wheat is 8% planted compared to both last year and the 5-year average of 12%.
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Commercial Sales
- Net U.S. wheat sales of 287,000 MT as of September 12 were 53% lower than last week’s 611,000 MT and below trade expectations of 300,000 MT to 600,000 MT. Year-to-date commercial sales of 12.3 million metric tons (MMT) are 20% 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.
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- For the week ending on September 17, the U.S. Drought Monitor reported moderate to heavy rainfall across much of the Northern Plains. Dry weather intensified in southwestern Kansas, expanding areas under abnormal dryness and moderate drought. Looking ahead, more rainfall is expected from parts of Oklahoma north through eastern Montana.
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- As of September 16, Russia’s Ministry of Agriculture reported the country’s total grain harvest at 74% complete at 97.6 MMT compared to 87.6 MMT this time last year. USDA estimates Russian wheat production will total 73.0 MMT in 2019. Russia’s Ministry of Agriculture estimates the country’s 2019 wheat harvest now totals 67.6 MMT.
- Ukraine’s Ministry of Agriculture reported Ukrainian total grain exports, as of September 16, at 11.1 MMT, up 52% from this time last year. USDA estimates Ukraine will export 19.0 MMT of wheat in 2019, up 21% from 2018/19 levels, if realized. Ukraine’s Ministry of Agriculture estimates the country’s 2019/20 wheat exports now total 6.75 MMT.
- On September 17, the Australian Bureau of Agricultural and Resource Economics (ABARES) reduced the country’s wheat export forecast by 8% from 11.7 MMT to 10.8 MMT as the country’s drought continues to challenge national wheat production. USDA expects Australian wheat exports will total 10.5 MMT, up 14% from 2018/19 levels but 33% below the 5-year average of 15.6 MMT, if realized.
- According to Reuters, starting October 1, Morocco’s government will reduce its soft (non-durum) wheat import duty from 135% to 35%. Government officials said the move will ensure regular soft-wheat supplies, boost national reserves and stabilize soft-wheat prices.
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Baltic and U.S. Dollar Indices
- The Baltic Dry Index fell 5% from last week’s 2,312 to close at 2,192.
- The U.S. Dollar Index rose from 98.26 last week to end at 98.53 this week.
Source: U.S. Wheat Associates