Dry Conditions Lower Argentina’s Wheat Estimates
World-Grain – 10/28/2019
Inconsistent weather conditions in key wheat-producing regions of Argentina could lead to a decline in production and export volumes, S&P Global Platts reported. The Buenos Aires Grain Exchange said in its weekly report that the wheat crop in Buenos Aires province is in critical condition. Dry weather conditions in the central and southern regions over the last two to three months has resulted in yield losses of around 10%-40% in some areas of Santa Fe, Buenos Aires and Cordoba, according to the Rosario Board of Trade. Agencies have cut the 2019-20 marketing season estimates for Argentina’s wheat production. The Rosario Board of Trade now estimates the crop at 20 million tonnes, down from 21.5 million tonnes and the Buenos Aires Grain Exchange now estimates a crop of 19.8 million tonnes, down from 21 million tonnes.
Beijing’s Hesitation to Commit to Buying Farm Goods is a Big Sticking Point
Reuters – 10/30/2019
U.S. President Donald Trump’s demand that Beijing commit to big purchases of American farm products has become a major sticking point in talks to end the Sino-U.S. trade war, according to several people briefed on the negotiations. Trump has said publicly that China could buy as much as $50 billion of U.S. farm products, more than double the annual amount it did the year before the trade war started. U.S. officials continue to push for that in talks, while Beijing is balking at committing to a large figure and a specific time frame. Chinese buyers would like the discretion to buy based on market conditions. “China does not want to buy a lot of products that people here don’t need or to buy something at a time when it is not in demand,” an official from a Chinese state-owned company explained. If U.S. agricultural products “enter China in a concentrated way, it might be hard for the domestic market to digest,” the Chinese official added. Oversupply of agricultural products in China would hit local prices really hard, he said, “and break the supply-demand balance.”
Hard Times for Hard Wheat
Farm Progress – 10/29/2019
USDA’s first ratings for winter wheat put out the fall before harvest are notoriously unreliable indicators of where final production will wind up many months later. A lot can happen to winter wheat over the winter, spring and summer, so what you see now is not necessarily what you’ll get come harvest. That said, sometimes the ratings hold up – last year a good start held through during the growing season, with final yields nationwide setting a record. So, while it’s early, USDA’s first ratings out Oct. 28 suggest potential for hard red winter wheat’s big discount to other classes may finally be ready to correct. While any adjustment will take time, the spread’s change could have a big impact on marketing both 2019 and 2020 wheat. The ratings showed a stark contrast between east and west. Most of the soft red winter wheat states showed better yield potential than 2019, when lower acreage took production to an eight-year low, tightening stocks despite relatively tepid demand.
Weather Hammers Durum, Spring Wheat Crops
Dakota Farmer – 10/30/2019
The 2019 durum crop produced in North Dakota and Montana is smaller than 2018 and is skewed lower in overall quality due to historic rains during the month of September and a significantly delayed harvest, NDWC reports. Production in North Dakota and Montana is estimated at 52 million bushels, down 20% from 2018, as planted area fell by 35%. Excellent mid-season moisture propelled the crop to well above average yields in many areas, offsetting part of the acreage decline. Final production may fall further from current estimates however, as roughly 20% of the crop in the region remained unharvested as of mid-October. Due to the unusual harvest conditions this year, the entire crop is not represented in this crop quality report. Only 77% of the expected durum samples were collected and analyzed for this report, and a higher-than-normal percentage of the crop will be moved directly into feed channels.
Source: U.S. Wheat Associates