- The prospect of increased wheat production and exports out of the Black Sea (see below) pressured all wheat futures prices week over week. CBOT soft red winter (SRW) futures fell 36 cents to close at $4.95/bu. KCBT hard red winter (HRW) futures lost 27 cents to end at $4.15/bu. MGE hard red spring (HRS) futures dropped 19 cents to close at $4.94/bu. CBOT corn futures fell 8 cents to end at $3.08/bu. CBOT soybean futures lost 24 cents to close at $8.66/bu.
- Tight export elevation capacity and higher secondary rail rates supported HRS export basis for August and September deliveries. Pacific Northwest (PNW) HRW export basis came down on the week as the 2020 harvest accelerates in Montana. PNW soft white export prices fell 3% week-over-week due to significantly lower Chicago SRW futures prices.
- Good weather is helping speed the 2020 HRW harvest in the northern United States. South Dakota is close to 90% complete, Montana 20%, Idaho 21% and Washington 25%, with favorable conditions ahead to build momentum. Industry is pleased with the overall quality of this crop. Read the U.S. Wheat Associates (USW) August 7 Harvest Report to learn more about the 2020 U.S. wheat harvest.
- The 2020 HRS harvest in South Dakota is now 35% complete. HRS conditions in Minnesota are up this week to 75% good to excellent; North Dakota HRS fell to 68% good to excellent; Montana held steady at 80% good to excellent; conditions in South Dakota improved this week and now 66% of the state’s HRS is in good to excellent condition.
- USDA crop conditions for winter and spring soft white wheat are steady week-over-week. The soft white winter crop harvest is picking up speed with 33% harvested in Washington, 21% in Idaho and 61% in Oregon. Spring crop harvest is underway with 9% harvested in Washington, 7% in Idaho and 15% in Oregon. Industry reports initial overall yield is average to above average.
- This week’s commercial sales of 605,000 metric tons (MT) for delivery in 2020/21, as of July 30, were 11% less than last week’s 677,000 MT but in line with trade expectations of 200,000 MT to 800,000 MT. Year-to-date commercial sales now total 10.2 million metric tons (MMT), 9% ahead of 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.
- This week, beneficial precipitation alleviated dryness in western Montana, southeastern Wyoming, northeastern Colorado and the Nebraska Panhandle. Extreme drought spread across the Texas Panhandle and western Oklahoma. Looking ahead, dry conditions are expected to persist across the Northern and Southern Plains.
- IKAR, a Russian agriculture consultancy, increased its Russian wheat production forecast by 1.5 MMT to 79.5 MMT due to higher yields in the country’s central and Volga regions. If realized, Russia’s total 2020 wheat output would jump 8% from last year’s 73.6 MMT. So far, Russian farmers have harvested 47.6 MMT, or 60% of the total forecasted output.
- Ukrainian agriculture consultancy, ProAgro, increased its forecast for Ukraine’s total wheat exports to 18.4 MMT from last month’s estimate of 17.8 MMT. If realized, total Ukrainian wheat exports would still drop 10% from last year’s record of 20.5 MMT.
- German wheat production is forecast to fall 12% on the year to 20.2 MMT on lower planted area and lower average yields, the German Statistical Office said on August 3.
- Extreme drought through the 2020 growing season could significantly pressure Romanian wheat production, said the country’s Agriculture Minister, Adrian Oros. If realized, Romanian wheat production would drop 42% on the year to 5.50 MMT. So far, Romanian wheat farmers have harvested 89% of their crop.
- Following the explosion in Lebanon’s Port of Beirut that severely damaged a grain silo and other port logistics, Ahmed Hatteet, the head of the country’s wheat importer’s union, said Lebanon has enough grain stocks in for another 1.5 months and is not expected to face a supply crisis.
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 gained 11% this week to close at 1,500.
- The U.S. Dollar Index fell week-over-week to 93.40.