December 20, 2019
- Price Report will not be published on December 27. The next Price Report will be published on January 3, 2020.
- U.S. Wheat Associates Headquarters and West Coast Offices will be closed in the afternoon on Tuesday, December 24, and Wednesday, December 25, for the Christmas Holiday. Both offices will also be closed in the afternoon on Tuesday, December 31, and Wednesday, January 1, for the New Years Holiday.
- All wheat futures rallied week-over-week on the news of a phase-one trade deal with China, new wheat export taxes in Argentina (see below) and technical buying. Soft red winter (SRW) futures gained 10 cents to close at $5.42/bu. Hard red winter (HRW) futured gained 19 cents to end at $4.62/bu. Hard red spring (HRS) futures rallied 11 cents to close at $5.37/bu. CBOT corn futures added 7 cents to end at $3.88/bu. CBOT soybean futures gained 17 cents to close at $9.38/bu.
- Increased farmer selling following this week’s futures rally and cheaper rail rates pressured Pacific Northwest (PNW) HRS and HRW export basis and Gulf HRS export basis for January and February deliveries. Tight, diminishing exportable supplies and steady demand kept SRW export basis steady and high week-over-week. The Great Lakes – St. Lawrence Seaway System will close for the season on December 31, 2019 and will re-open in March 2020.
- This week’s U.S. wheat commercial sales of 869,000 metric tons (MT) for delivery in 2019/20 were 73% higher than last week’s 503,000 MT and well above trade expectations of 200,000 to 600,000 MT. This is the highest weekly sales total for U.S. wheat in marketing year 2019/20. Year-to-date commercial sales of 17.8 million metric tons (MMT) are 7% ahead of last year’s pace. USDA forecasts 2019/20 U.S. wheat exports will total 26.5 MMT, 4% more than 2018/19, if realized. USDA expects the U.S. to export 10.6 MMT of HRW, 7.10 MMT of HRS, 2.72 MMT of SRW, 5.20 MMT of white wheat and 0.95 MMT of durum.
- Click here to view the most recent USW Commercial Sales report.
- The Dec. 17 Drought Monitor reported abnormal dryness and moderate drought in major HRW producing regions in north central Texas, the eastern region of the Texas panhandle, western Oklahoma, central and western Kansas and southeastern Colorado. Abnormal dryness was also introduced to south central Nebraska. Most soft white wheat growing regions in northeastern Oregon, southeastern Washington and northwestern Idaho are abnormally dry or moderately drought-stricken.
- According to the United Kingdom’s (UK) Agriculture and Horticulture Development Board (AHDB), by the end of November, only 60% of the country’s winter wheat for harvest in 2020/21 was planted due to overly wet planting conditions. Spring wheat planted area is expected to increase in 2020 to compensate for winter planting losses, but AHDB expects total wheat planted area for harvest in 2020/21 to fall 9% year-over-year to 1.65 million hectares (4.08 million acres). According to AgriCensus, UK millers usually buy German wheat in the spring to blend with domestic supplies. However, UK millers have already started buying cargoes of German wheat for delivery in 2020 on the worry that next year’s domestic crop will fall short.
- On Dec. 16, agriculture consultancy APK-Inform predicted Ukrainian winter wheat planted area for harvest in 2020 fell 10% on the year due to extremely dry autumn weather. The area that produces more than 95% of Ukrainian winter wheat fell to 5.93 million hectares (14.6 million acres) from last year’s 6.64 million hectares (16.4 million acres). The consultancy says half of the country’s winter wheat that was planted is in good condition.
- Over the weekend of Dec.14, Argentina’s government announced new agricultural export taxes. According to Reuters, Argentina’s president Alberto Fernandez increased the export tax rate for soybeans, soy oil and soymeal to 30% from about 25%. The tax on wheat and corn exports increased from around 7% to 12%. Higher taxes could prompt decreases in farm investments by Argentinian producers as higher taxes threated farm profits.
- As of Dec. 19, according to Bolsa de Cereales, less than 1% of Argentina’s wheat crop is in good condition and none of the country’s wheat crop is in excellent condition compared to 31% in good condition and 5% in excellent condition this time last year. The Argentinian wheat harvest is 77% complete compared to 68% last year and the 5-year average of 63%.
- On Dec. 19, Agriculture and Agrifood Canada (AAC) published its Outlook for Principle Field Crops for 2019/20. AAC estimates Canadian durum production fell 13% from 2018/19 to 4.98 MMT on significantly lower planted area. Durum exports are expected to increase 6% on the year to 4.80 MMT due to lower global production. Canadian non-durum wheat production rose 3% in 2019/20 to 27.4 MMT on slightly higher planted area. Non-durum exports are expected to fall 5% year-over-year to 18.8 MMT due to high global production and increased competition from other major wheat exporters.
- According to national German statistical data, German winter wheat planted area for harvest in 2020 fell 7% from last year’s planted area to 2.83 million hectares (6.99 million acres). Instead, German farmers increased winter rapeseed planted area by 12% over last year to 952,000 hectares (2.35 million acres) on stronger marketing conditions for the winter oilseed.
Baltic and U.S. Dollar Indices
- The Baltic Dry Index (BDI) fell 15% week-over-week to end at 1,151.
- The U.S. Dollar Index climbed from last week’s 97.17 to close at 97.68.
Source: U.S. Wheat Associates