US Wheat Associates

• Winter wheat harvest progress across the United States (see below) and technical selling pressured all wheat futures prices week-over-week. CBOT September soft red winter (SRW) futures fell 9 cents to end at $4.76/bu. KCBT September hard red winter (HRW) futures lost 8 cents to close at $4.28/bu. MGE September hard red spring (HRS) futures lost 26 cents to end at $5.09/bu. CBOT September corn futures fell 18 cents to close at $3.19/bu. CBOT September soybean futures lost 18 cents to end at $8.57/bu.

• All U.S. Wheat Associates (USW) basis and FOB prices for all classes of wheat for July delivery are now over the September 2020 (U20) wheat futures contracts.

• The anticipation of future commercial elevator selling pressured Pacific Northwest (PNW) HRS export basis for July and August deliveries. Minimal farmer selling due to reduced futures prices supported PNW HRW export basis week-over-week. Lower CBOT SRW futures prices pressured PNW soft white wheat (SW) export prices week-over-week. Minimal elevation capacity out of the Center Gulf and Texas Gulf due to increased export demand for soybeans, corn and sorghum supported Gulf HRS, HRW and SRW export basis for nearby and deferred deliveries. To read more about the effects of reduced elevation capacity out of the Gulf on U.S. wheat export prices, click here.

• Despite worsening dryness across the western Great Plains (see below), total U.S winter wheat ratings improved two points on the week to 54% good to excellent. Total crop ratings in Kansas improved from last week to 44% good to excellent. Nebraska crop ratings rebounded from last week’s 43% good to excellent to 62% this week. In Colorado, winter wheat rated as good to excellent fell slightly from last week to 29% good to excellent.

• The new crop U.S. HRW harvest is in full swing from Texas to central Kansas and the SRW harvest is well underway from Arkansas to Alabama. According to USDA, as of June 22, 29% of the country’s total winter wheat area is harvested. Click here to read more about the 2020 U.S. wheat harvest.

• Total U.S. spring wheat ratings fell 6 points from last week to 75% good to excellent on worsening dryness across the Northern Plains (see below). Total crop ratings in North Dakota fell from 78% good to excellent last week to 69% this week. Minnesota crop ratings fell 7 points from last week to 81% good to excellent this week. In South Dakota, spring wheat rated as good to excellent increased 7 points from last week to 77%.

Commercial Sales

• This week’s commercial sales of 519,000 metric tons (MT) for delivery in 2020/21, through June 18, were up 3% from last week’s 505,000 MT and within trade expectations of 250,000 MT to 650,000 MT. Year-to-date commercial sales for delivery in 2020/21 total 6.85 million metric tons (MMT), 1% behind last year’s pace. USDA expects all 2020/21 U.S. wheat exports will total 25.9 MMT, down 2% from 2019/20, if realized.

• Click here to view the most recent USW Commercial Sales report.

U.S. Drought Monitor

• Beneficial precipitation alleviated some areas under abnormal dryness in central Kansas while moderate drought spread in southwestern Nebraska, western South Dakota and western North Dakota. Abnormal dryness and moderate drought persist in central Minnesota. Looking ahead, scattered precipitation is expected to relieve dryness across parts of the Northern Plains. Variable rainfall across the Southern Plains could delay the winter wheat harvest in some areas.

• According to AgriCensus, Brazil’s government could move to boost domestic wheat production with the goal of reducing the country’s dependency on wheat imports from Argentina. Last year, Brazil imported 7.20 MMT of wheat from all origins, 85% of which came from Argentina. According to USDA, Brazil is forecast to produce 5.50 MMT of wheat in 2020/21, up 6% from last year’s output, if realized.

• IKAR, a Russian agriculture consultancy increased its 2020 Russian wheat production estimate to 79.5 MMT, up 2% from its previous estimate and 8% more than last year, if realized. IKAR increased its estimate for Russian wheat exports to 37.0 MMT, up 2.0 MMT from its previous forecast. That would be 10% more wheat exported in 2020/21 than the year prior. Agritel, a European agriculture consultancy, believes Russia will begin its winter wheat harvest within the next two weeks.

• Total French soft (non-durum) wheat ratings are stable week-over-week at 56% good to excellent as beneficial precipitation and mild temperatures in early June alleviated the effects of an extremely dry spring. However, this week’s soft wheat ratings are 24 points lower than this time last year and are the country’s lowest total ratings since Jun 2011.

• Argentinian wheat planting for the 2020/21 season jumped from last week to 71% complete, 9 points ahead of the 5-year average. According to the Buenos Aires Grain Exchange (BAGE), as of June 25, 21% of the country’s wheat is in excellent condition, 5 points ahead of last week on recent precipitation but 21 points behind last year on persistent dryness through the planting season.

• The European Commission (EC) lowered its forecast for total European Union (EU) soft wheat production to 117 MMT, down 3% from last month’s estimate and 20% lower than last year’s output on extreme dryness in France and Germany during the growing season.

Baltic and U.S. Dollar Indices

• The Baltic Dry Index (BDI), an assessment of the average cost to ship raw materials like grains, coal and iron ore, jumped 12% on the week to end at 1,738.

• The U.S. Dollar Index fell slightly from last week to close at 97.44.