- Significant technical buying supported all futures prices week-over-week. CBOT soft red winter (SRW) futures jumped up 20 cents to end at $5.94/bu. KCBT hard red winter (HRW) futures added 26 cents to close at $5.35/bu. MGE hard red spring (HRS) futures gained 12 cents to end at $5.44/bu. CBOT corn future added 15 cents to close at $3.95/bu. CBOT January soybean futures jumped up 41 cents to end at $10.66/bu.
- This week, substantially higher futures prices stimulated farmer selling which pressured Gulf HRW export basis for November and December deliveries. Extremely limited elevation capacity supported Pacific Northwest (PNW) HRS export basis for nearby and deferred deliveries. Limited elevation capacity offset increased farmer selling which held PNW HRW export basis and soft white (SW) export prices stable week-over-week.
- The entire 2020 U.S. northern durum crop is in the bin, as of Oct. 9. 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 52% of the total intended winter wheat area for harvest in 2021, up 17 points on the week. That is 4 points ahead of this time last year and 5 points ahead of the 5-year average. As of Oct. 5, 24% of the country’s winter wheat is emerged, led by South Dakota at 38% and Washington state at 54%.
- USDA’s October World Agriculture Supply and Demand Estimates (WASDE) report called for reduced U.S. wheat supplies, higher domestic use, unchanged exports and lower ending stocks. The season-average farm gate price for wheat was raised 20 cents per bushel to $4.70/bu from the agency’s September report. Worldwide, the global outlook calls for larger wheat supplies, increased consumption, greater exports and higher ending stocks. Russia is expected to harvest its second largest wheat crop on record. USDA reduced Canadian, United States, Ukrainian and Argentinian wheat production estimates month-over-month. China is set to be the world’s third largest importer of wheat from all origins in 2020/21 at 7.50 million metric tons (MMT).
- This week’s commercial sales of 531,000 metric tons (MT) for delivery in 2020/21, as of Oct. 1, were up 5% from last week’s 506,000 MT and on the high end of trade expectations of 250,000 MT to 600,000 MT. Year-to-date commercial sales now total 14.5 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.
- Click here to view the most recent USW Commercial Sales report.
- This week, severe drought expanded in eastern Montana and central North Dakota. Areas under extreme drought expanded in the Nebraska Panhandle, eastern Colorado and western Oklahoma. According to DTN, extremely warm, dry conditions are forecast across the Southern Plains over the next two weeks and soil moisture levels for the region’s wheat fields and pastures is in decline. Dry weather is expected to persist across the Northern Plains over the next few days.
- Argentina’s Buenos Aires Grain Exchange (BAGE) reported that continued dry conditions have cut wheat yield potential. The Rosario Grain Exchange (BCR) recently backed up that prediction, stating that initial expectations of a record 2020/21 crop of up to 22.0 MMT are now sharply reduced to 18.0 MMT. In other news, Argentina’s Ministry of Agriculture, Livestock and Fisheries approved for commercial cultivation a genetically-modified strain of wheat that the developer suggests offers drought tolerance. Its commercial use, however, is pending approval for by Brazil, which is Argentina’s largest wheat importing customer.
- While USDA increased its estimate of Russian wheat production for 2020/21 to 83.0 MMT, the country’s agricultural ministry recently raised its wheat production forecast to 86.6 MMT based on better than expected spring wheat yields. The ministry also reported that seeding progress accelerated in the past week despite dry conditions and now stands at 70% of expected area. Agriculture Minister Dmitry Patrushev was quoted by InterFax this week saying Russia could set a grain export quota for January to June 2021 “if there is a need to secure domestic supplies.”
- Rain in Ukraine the week of Sept.29 has slightly improved conditions for winter wheat planting, but has slowed down the harvest, AgriCensus reported. Ukraine has faced drought conditions since July that has hit much of the country’s major producing regions. Almost half of winter wheat sowing was done with 2.90 million hectares planted of 6.10 million hectares planned.
- Agricultural web publication Grain Central reported that harvest is now under way in all Australia’s wheat producing states except Victoria. Rain in South Australia has slowed the first week of harvest but ideal conditions in Western Australia, northern New South Wales and Queensland helped accelerate harvest pace, Grain Central said. The Australian Bureau of Agriculture, Water and the Environment (ABARES) in September pegged production at 28.9 MMT, which would be 28% more than the 10-year average and 91% more than the 2019/20 harvest. USDA currently expects Australia to produce 28.5 MMT of wheat for 2020/21.
- The United Kingdom’s (UK) Department for Environment, Food and Rural Affairs this week provisionally estimated the 2020 UK wheat crop at 10.1 MMT, a 37% drop from 2019. If confirmed this would be the smallest crop since 1981. AgriCensus reports that while French wheat “remains expensive compared with other European origins,” China has maintained demand with additional trades concluded with China over the past week.
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 slightly on the week to end at 1,970.
- The U.S. Dollar index fell from last week’s 93.84 to close at 93.05.