- All wheat futures prices ended higher on the week due to short covering and technical buying. CBOT soft red winter (SRW) futures added 1 cent to end at $5.40/bu. KCBT hard red winter (HRW) futures gained 13 cents to close at $4.74/bu. MGE hard red spring (HRS) futures ended 6 cents up at $5.25/bu. CBOT corn futures added 1 cent to close at $3.47/bu. CBOT soybean futures gained 19 cents to end at $9.69/bu.
- Limited export elevation capacity and high rates in the domestic secondary rail market supported Gulf and Pacific Northwest (PNW) HRS export basis for September and October deliveries. Click here to read more about tight elevation capacity and secondary rail rates. Limited farmer selling supported PNW soft white (SW) export prices week-over-week.
- The 2020 U.S. HRW and SRW harvests are officially complete and preparations for the 2021 crop have now begun. The PNW SW harvest made strong progress this week on favorable field conditions. Farmers in Washington have harvested 88% of the expected SW crop. Idaho’s SW crop is 94% harvested and Oregon’s SW harvest is now complete.
- Approximately 69% of the HRS crop is now harvested with South Dakota more than 96% complete, Minnesota 85% harvested, Montana 74% finished and North Dakota 59% complete. Overall, producers are reporting average to above average yields across the growing region. No major harvest or quality issues have been reported thus far. Cool nights and shorter days are expected to slow harvest progress next week.
- Click here to read USW’s weekly harvest report.
- This week’s commercial sales of 585,000 metric tons (MT) for delivery in 2020/21, as of Aug. 27, were down 23% from last week’s 764,000 MT but on the high end of trade expectations of 350,000 MT to 600,000 MT. Year-to-date commercial sales now total 12.5 million metric tons (MMT), 9% ahead of last year’s pace. USDA expects the United States will export 26.5 MMT of wheat in 2020/21, up 1% from last year, if realized.
- Click here to view the most recent USW Commercial Sales report.
- This week, abnormal dryness spread across most of central Montana and central Nebraska. Beneficial precipitation alleviated areas under extreme drought in the Texas Panhandle, but most of the region remains extremely dry. As of Sept. 3, all of eastern Colorado, where a majority of the state’s wheat is grown, and western Kansas are under severe to extreme drought. Continued dryness in this region could pose serious challenges for winter wheat farmers as they prepare for fall seeding. Looking ahead, sharply lower temperatures and moderate precipitation are expected across the Southern and Northern Plains.
- According to Agritel, a European agriculture consultancy, French soft (non-durum) wheat production is expected to fall 25% on the year to 29.5 MMT following an overly wet fall in 2019 and an extremely dry growing season throughout 2020. The consultancy believes the drop in production could result in a 40% decrease in French soft wheat exports in marketing year 2020/21.
- Canada is set to reach its second-highest level of wheat production in over a century on increased harvested area and higher yield estimates for winter wheat and durum. “The projected increase in wheat area is largely attributable to the durum wheat and winter wheat area remaining after winterkill, which offset the decrease in spring wheat area,” said Statistics Canada (Statscan) on Aug. 31.
- Ukraine’s Ministry of Agriculture reduced the country’s 2020 wheat production estimate to 26.6 MMT, down 200,000 MT from the previous forecast and down 9% from last year’s record, if realized, due to dry conditions throughout the growing season.
- Russian farmers have harvested 73.6 MMT of wheat as of Sept. 2, 21% ahead of this time last year. According to the country’s Ministry of Agriculture, the total average yield is up slightly this year at 50.6 bu/acre (3.40 MT/ha).
- Beneficial precipitation across Argentina’s central and southern regions over the past week brought much-needed relief to the maturing wheat crop, according to the Buenos Aires Grains Exchange (BAGE) on Sept. 3. The exchange estimated that 46% of the crop has received an optimal amount of moisture, an increase from last week’s 38%, but below last year’s 56%.
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 fell 7% from last week to end at 1,395.
- The U.S. Dollar Index increased from last week’s 92.37 to close at 92.73.