- All wheat futures prices jumped up substantially on the week after USDA’s Sept. 30 U.S. wheat stocks and production estimates came in below trade expectations (see below). CBOT soft red winter (SRW) futures gained 29 cents to close at $5.73/bu. KCBT hard red winter (HRW) futures jumped up 34 cents to end at $5.09/bu. MGE hard red spring (HRS) futures added 2 cents to close at $5.32/bu. CBOT corn futures added 14 cents to close at $3.80/bu. CBOT January soybean futures gained 18 cents to end at $10.25/bu.
- USDA’s Sept. 30 Grain Stocks report estimated all U.S. wheat stocks, as of Sept. 1, at 58.8 million metric tons (MMT), below trade expectations. Reuters reported the average trade estimate at 61.0 MMT. USDA’s Sept. 30 Small Grains Annual Summary pegged total U.S. wheat production in 2020 at 49.7 MMT, which was less than the agency’s Sept. 11 estimate of 50.0 MMT.
- Pacific Northwest (PNW) HRS export basis increased this the week on extremely limited elevation capacity. However, lower secondary rail rates pressured Great Lakes HRS export basis and Gulf HRW export basis for November and December deliveries.
- The entire HRS crop is in the bin, as of Oct. 2. Early sample data shows stable protein levels on the year, significantly lower moisture content and higher average test weights. The 2020 northern durum harvest is 95% complete in North Dakota and 90% complete in Montana, well ahead of last year’s pace. Like HRS, early northern durum samples are showing stable protein levels, lower moisture content and higher average test weights compared to the 2019 harvest.
- Click here to read more about the 2020 U.S. wheat harvest.
- According to USDA, U.S. farmers have now planted 35% of the total intended winter wheat area for harvest in 2021, up 15 points on the week. That is 1 point ahead of this time last year and two points ahead of the 5-year average. As of Sept. 28, 10% of the country’s winter wheat is emerged led by Colorado at 19% and Washington State at 32%.
- This week’s commercial sales of 506,000 metric tons (MT) for delivery in 2020/21, as of Sept. 17, were up 44% from last week’s 351,000 MT and above trade expectations of 200,000 MT to 500,000 MT. Year-to-date commercial sales now total 14.0 million MMT, 8% ahead of last year’s pace. USDA expects the United States will export 26.5 MMT in 2020/21, up 1% from last year, if realized.
- This week, USDA reported Mexico bought 208,000 MT of HRW from the United States. Following these sales, Mexico surpassed China as the second largest market for U.S. wheat so far in 2020/21 at 1.60 MMT sold as of Sept. 24. The Philippines, with purchases of 1.60 MMT, is the largest market for U.S. wheat to date.
- Click here to view the most recent USW Commercial Sales report.
- This week, abnormal dryness spread across all of South Dakota and Nebraska, most of Kansas and parts of northern Oklahoma and central Minnesota. Moderate drought spread through central Montana, central North Dakota and northwestern Kansas. Pockets of exceptional drought, the highest level of drought reported by the U.S. Drought Monitor, appeared in eastern Colorado and the Texas Panhandle. Looking ahead, scattered rainfall is expected across the Southern and High Plains, but dryness is expected to intensify in Kansas, Colorado and Nebraska.
- Soft (non-durum) wheat exports from the European Union (EU) and the United Kingdom (UK) for marketing year 2020/21 are down 39% from last year at 4.37 MMT, according to official EU data on Sept. 27.
- SovEcon, a Russian agriculture consultancy, said the country badly needs rain in the coming weeks as farmers continue to sow winter wheat for harvest in 2021 in dry soil. SovEcon’s Sept. 28 report noted: “The topsoil is dry, and crops are running out of time needed for their development before winter. It is a bad setup for the 2021 crop, but not a disastrous one as of yet.” Despite dry weather, Russian producers have already planted winter grains on 60% of the planned area, or 11 million hectares (27.2 million acres), in line with last year’s pace.
- Ukraine’s Economy Ministry said severe drought will lead to a reduction of winter wheat planted area for harvest in 2021 to 6.10 million hectares (15.1 million acres), down 9% on the year. As of Sept. 28, farmers have planted 25% of the expected area at 1.50 million hectares (3.70 million acres).
- On Sept. 29, Australia’s Bureau of Meteorology declared that La Niña conditions had developed in the Pacific Ocean. La Niña weather patterns are typically associated with greater rainfall, more tropical cyclones and cooler than average temperatures in the equatorial Pacific Ocean. “Climate models suggest these patterns will continue until at least the end of the year,” the bureau said in a statement. The weather event, which mainly affects Australia’s north and east, could boost the country’s 2020/21 wheat yields.
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 1,869.
- The U.S. Dollar index fell from last week’s 94.64 to close at 93.84.