April 30, 2021
- With persistent dry conditions and possible increased global demand for feed wheat, all futures prices continued to climb higher, for the fourth week in a row. CBOT soft red winter (SRW) futures rose 32 cents to close at $7.42/bu. KCBT hard red winter (HRW) futures were up 25 cents to end at $6.98/bu. MGE hard red spring (HRS) futures gained 45 cents to close at $7.63/bu. CBOT corn futures jumped 85 cents to end at $7.40/bu. CBOT soybean futures gained 32 cents to close at $15.71/bu.
- Basis remains flat in the gulf and slightly lower in the PNW as export demand remains light and higher cash prices fail to incentivize farmer selling.
- USDA reported U.S. winter wheat conditions declined this week. Winter wheat reported as good or excellent was 49%, 8% below last week’s rating as dry conditions persisted in much of the hard red winter producing region.
- U.S spring wheat for harvest in fall 2021 is 28% planted, well ahead of the 19% five-year average. Spring wheat emergence is 7%, 2 points above the five-year average.
Commercial Sales
- This week’s U.S. wheat commercial sales of 223,600 metric tons (MT) were down 7% from last week’s 240,200 metric tons (MT) and below trade expectations of 400,000 MT to 625,000 MT. Year-to-date commercial sales for delivery in 2020/21 total 25.6 million metric tons (MMT) 1% lower than last year. USDA expects total 2020/21 U.S. wheat exports will reach 26.8 million metric tons (MMT) 2% higher than last year, if realized.
- This week’s commercial sales for delivery in 2021/22 totaled 233,600 metric tons (MT).
- View the most recent USW Commercial Sales report here.
U.S. Drought Monitor
- Conditions in the western half of Texas and Oklahoma remained dry this week. Parts of southeast Kansas, Colorado the Dakotas, Wyoming and western Montana received some rain but most of the region remained excessively dry. Across the Dakota’s and parts of Montana, low soil moisture was reported and streams are low. The USDA rates Colorado, Montana and Wyoming as being more than 50% short or very short of topsoil moisture.
- The European Commission lowered its common wheat production forecast for 2021/22 to 124.8 MMT from its initial estimate of 126.7 MMT last month. Export projections were not changed and remain at 30.0 MMT. Soft wheat ending stocks are 11.4 MMT, down from 12.9 MMT called for last month. Despite the reduction, production would be more than the 117.2 MMT produced in 2020/21.
- Ukraine’s wheat harvest is expected to grow by 9.5% to 27.7 MMT this year and wheat exports are boosted to 21.0 MMT for the 2021/22 July-June season said the Ukrainian grain trader’s union UGA.
- India’s wheat stocks, already high, are expected to grow this year as Indian farmers may harvest a record 109.0 MMT of wheat. While farmers continue to protest government reforms meant to make farming more efficient, traders say the government will likely have to purchase farmer wheat at guaranteed prices. Wheat stocks in government silos are estimated at 27.3 MMT. Last year, the Food Corporation of India (FCI) purchased 39.0 MMT of wheat directly from farmers.
- The USDA’s Foreign Agriculture Service (FAS) forecasted Australia’s wheat production in 2021/22 to be 27.0 MMT. The FAS officials in Australia also expect wheat exports at 19.0 MMT, down from 23.0 MMT forecast in 2020/21.
- According to FAS officials based in Ottawa, Canada’s total wheat production will fall 5% in 2021/22 and yields will be close to the 5-year average. Spring wheat production is expected to fall while durum production is expected to increase. Regions of Alberta, Manitoba, and Saskatchewan need significant amounts of precipitation.
Baltic and U.S. Dollar Indices
- The Baltic Dry Index (BDI), an assessment of the average cost to ship raw materials such as grains, coal and iron ore, gained 9% on the week to end at 3,007. More information about rising ocean freight rates is available here.
- The U.S. Dollar Index increased from last week’s 90.87 to close at 91.26.