November 22, 2019
- Technical buying and short covering supported both winter wheat futures contracts week-over-week while technical selling pressured the spring wheat futures contract. Soft red winter (SRW) March 2020 futures gained 13 cents on the week to close at $5.19/bu. Hard red winter (HRW) March futures gained 7 cents to end at $4.33/bu. Hard red spring (HRS) March futures lost 12 cents to close at $5.06/bu. CBOT March corn futures lost 2 cents to end at $3.78. CBOT March soybean futures lost 19 cents to close at $9.11/bu.
- Great Lakes HRS export basis softened for nearby delivery as traders roll price indications forward from the December HRS futures contract to the higher March HRS futures contract. Gulf HRS export basis for December delivery is steady and high week-over-week while Gulf HRS export basis for January delivery came up 20 cents due to minimal farmer selling. Minimal farmer selling kept Gulf HRW export basis steady and high on the week. Extremely tight exportable supplies and steady domestic and export demand supported SRW export basis for nearby and deferred deliveries. Limited export demand out of the Pacific Northwest (PNW) softened HRW export basis and soft white (SW) wheat export prices for December and January deliveries.
- The USW Price Report delivers export price indications for HRS with a 65% DHV content out of the PNW and HRS with a 40% DHV content out of the Gulf. Due to challenges during the 2019 HRS harvest, higher DHV levels will command a premium and lower DHV levels are discounted out of each export region. For specific HRS DHV premium spreads, contact your supplier.
- On Nov. 18, USDA reported U.S. winter wheat planting at 95% complete compared to 92% last year and the 5-year average of 95%.
- New U.S. wheat commercial sales of 438,000 metric tons (MT) were 83% higher than last week’s 239,000 MT and in line with trade expectations of 200,000 to 500,000 MT. Year-to-date commercial sales of 15.6 million metric tons (MMT) are 8% ahead of last year’s pace. USDA forecasts 2019/20 U.S. wheat exports will total 25.9 MMT, 1% more than 2018/19, if realized.
- Click here to view the most recent USW Commercial Sales report.
- The Nov. 19 Drought Monitor reported the expansion of areas under moderate to severe drought in HRW-producing regions in western Kansas, southeastern Colorado and the Oklahoma Panhandle. Extreme drought was introduced in the southwest corner of Kansas. Extremely cold weather and spotty showers were reported in the Midwest. Looking ahead, moderate precipitation is expected across the Southern Plains and Midwest. Dry weather is expected in the northern High Plains.
- According to Reuters, about 3,000 unionized workers from Canada’s largest rail company went on strike this week. According to AgriCensus, the strike follows the failure of Teamsters Canada and Canadian National Railway (CNR) to reach an agreement on pay and worker conditions. The strike could delay grain shipments in Canada and add more challenges for farmers following an already difficult and wet fall harvest.
- As of Nov. 20, according to Bolsa de Cereales, only 6% of Argentina’s wheat crop is in good to excellent condition compared to 35% this time last year. Less than 1% of the country’s wheat crop is in excellent condition compared to 6% last year. The Argentinian wheat harvest is now 20% complete compared to 22% last year and the 5-year average of 18%.
- The International Grains Council (IGC) forecasts total global area planted to wheat for harvest in marketing year (MY) 2020/21 will increase 1% over area planted for harvest in MY 2019/20. IGC expects global wheat planted area will total 218 million hectares (538 million acres) next year, up 2 million hectares (4.94 million acres) from the year prior.
______________________________________________________________________________Baltic and U.S. Dollar Indices
- The Baltic Dry Index fell from 7% from last week to close at 1,255.
- The U.S. Dollar Index fell from last week’s 97.99 to end at 98.27.
Source: U.S. Wheat Associates