October 16, 2020
Read the full report as a PDF
- Technical buying and concerns about dryness in the United States, Argentina and the Black Sea supported all wheat futures prices week-over-week. CBOT soft red winter (SRW) futures jumped 31 cents to end at $6.25/bu. KCBT hard red winter (HRW) futures added 23 cents to close at $5.59/bu. MGE hard red spring (HRS) futures gained 16 cents to end at $5.60/bu. CBOT corn futures added 7 cents to close at $4.02/bu. CBOT January soybean futures fell 15 cents to end at $10.50/bu.
- Limited elevation capacity due to a continued pace of agricultural exports to China supported export basis levels for Gulf HRW and Pacific Northwest (PNW) HRS week-over-week. Tight elevation capacity and higher futures prices supported PNW soft white (SW) export prices for nearby and deferred deliveries.
- Click here to read more about increased U.S. Free on Board (FOB) prices due to extremely limited elevation capacity and higher futures prices.
- According to USDA, U.S. farmers have now planted 68% of the total intended winter wheat area for harvest in 2021, up 16 points on the week. That is 7 points ahead of this time last year and 7 points ahead of the 5-year average. As of Oct. 12, 41% of the country’s winter wheat is emerged, led by Nebraska at 60% and Colorado at 56%.
- Commercial Sales
This week’s commercial sales of 528,000 metric tons (MT) for delivery in 2020/21, as of Oct. 8, were in line with last week’s volume and on the high end of trade expectations of 200,000 MT to 600,000 MT. Year-to-date commercial sales now total 15.0 million metric tons (MMT), 9% 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, abnormal dryness spread into eastern Montana, southwestern North Dakota and most of Kansas and central Oklahoma. Moderate drought expanded in central Montana, western South Dakota, western Kansas, northern Oklahoma and the Texas Panhandle. Extreme drought spread across the Nebraska Panhandle. All of eastern Colorado is now under severe, extreme or exceptional drought. Looking ahead, extreme dryness is expected to persist across the Southern Plains and could challenge early winter wheat development in that region. Colder temperatures and pockets of snow are expected across the Northern Plains.
- As of Oct. 8, official data showed European Union (EU) and United Kingdom (UK) soft (non-durum) wheat exports at 5.70 MMT, down 30% from this time last year.
- Ukraine’s Agriculture Ministry reported that farmers have now planted 9.39 million acres (3.80 million hectares) of wheat for harvest in 2021, or 63% of the total expected area.
- According to DTN, since the beginning of August, southern Russia has experienced its lowest rainfall in 30 years. However, Russian wheat areas are expected to benefit from moderate to heavy precipitation over the next 10 days. According to Russia’s Agriculture Ministry, as of Oct. 13, farmers have now planted 39.5 million acres (16.0 million hectares) of winter wheat for harvest next year, or 84% of the total intended area.
- On Oct. 14, FranceAgriMer, France’s farm office, increased its forecast for non-EU wheat exports in 2020/21 to 6.70 MMT, up 2% from its September estimate. This would still be 51% lower than the 13.5 MMT France exported in 2019/20 on reduced production due to extreme heat and dryness through the 2020 growing season.
- Western Australian (WA) farmers have now begun the 2020/21 wheat harvest. The Grains Industry Association of WA’s total production estimate is expected to fall from last month’s 14.0 MMT to under 12.0 MMT in October due to extreme dryness which pressured yield potential at the end of 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 fell 17% to end at 1,561.
- The U.S. Dollar Index increased from last week’s 93.06 to close at 93.69.