- The next Price Report will be published on Jan. 8, 2021. Happy holidays from U.S. Wheat Associates!
- Technical selling following the news that Russia plans to implement a wheat export tax (see below) pressured all wheat futures week-over-week. CBOT soft red winter (SRW) futures lost 6 cents to close at $6.08/bu. KCBT hard red winter (HRW) futures fell 12 cents to end at $5.69/bu. MGE hard red spring (HRS) futures lost 1 cent to close at $5.68/bu. CBOT corn futures gained 14 cents to end at $4.37/bu. CBOT March soybean futures jumped 58 cents to close at $12.24/bu.
- Nearby Gulf and Pacific Northwest (PNW) export basis for all classes of wheat remained steady on the week as the U.S. grain trade prepares for the upcoming holiday. Gulf and PNW HRS and HRW export basis for March and forward deliveries fell significantly on the week due to increased elevation availability for those delivery periods. Click here to read more about the relationship between U.S. export elevation availability and wheat export basis. The Great Lakes – St. Lawrence Seaway System will be closed from early January to mid-March 2021.
Commercial Sales
- This week’s commercial sales of 540,000 metric tons (MT) for delivery in 2020/21 were down 12% from last week’s 616,000 MT but within trade expectations of 250,00 MT to 650,000 MT. Year-to-date commercial sales now total 19.6 million metric tons (MMT), 10% ahead of last year’s pace. USDA forecasts total U.S. wheat exports will reach 26.8 MMT in 2020/21, 2% ahead of last year, if realized.
- Click here to view the most recent USW Commercial Sales report.
- This week, moderate to extreme drought spread from southeastern Colorado to the Texas Panhandle. Most of the Great Plains are now abnormally to exceptionally dry. Extreme dryness continues to plague winter wheat producers in western Nebraska, eastern Colorado and western Kansas. Looking ahead, dry conditions are expected to persist from the Southern to Northern Plains.
- According to AgriCensus, the Russian government has officially imposed a €25.0/MT ($30.6/MT) tax on all wheat exports from Feb. 15 to June 30, 2021 in an effort to stabilize domestic food prices. USDA still expects Russia will export 40.0 MMT of wheat in 2020/21, 16% more than last year and 21% more than the 5-year average, if realized.
- The Rosario Board of Trade (BCR) forecasts total Argentinian wheat production will fall 15% on the year to 16.5 MMT, the second-lowest output in a decade on extreme drought. The Buenos Aires Grain Exchange (BAGE) predicts production will total 16.9 MMT and USDA pegs the 2020/21 harvest at 18.0 MMT.
- As of Dec. 16, total Ukrainian grain exports are down 14% from this time last year at 23.8 MMT, 12.2 MMT of which is wheat. In October, Ukraine implemented a 17.5 MMT wheat export quota for the 2020/21 marketing year and current sales account for 70% of the quota.
- Stratégie Grains, a French agriculture consultancy, forecasts European Union (EU) soft (non-durum) wheat production will reach 130 MMT in 2021, 9% more than last year on improved planting conditions through fall 2020. The United Kingdom (UK), not included in the EU forecast, is expected to produce 15.0 MMT of soft wheat next year.
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, increased 7% on the week to end at 1,301.
- The U.S. Dollar Index fell from last week’s 90.98 to close at 90.02.
