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U.S. Wheat Associates Price Report

U.S. Wheat Associates Price Report

U.S. Wheat Associates Price Report

  • Futures prices were up this week. CBOT soft red winter (SRW) futures gained 24 cents to close at $6.87/bu. KCBT hard red winter (HRW) futures were up 23 cents to end at $6.36/bu. MGE hard red spring (HRS) futures surged this week on continued concerns over dryness in the HRS growing region. Futures rose 85 cents to close at $8.10/bu. CBOT corn futures gained 26 cents to end at $6.82/bu. CBOT soybean futures gained 53 cents to close at $15.83/bu.

  • Basis in the Gulf was little changed from last week as export inquires remained thin. In the Pacific Northwest, soft white (SW) basis was up due to weather concerns. Farmer selling remains slow in both export regions ahead of harvest.
  • On June 1, USDA reported U.S. winter wheat conditions at 51% good to excellent, gaining four points from last week. The USDA also reported 79% of the winter wheat crop headed. The U.S. spring wheat crop is 97% planted, ahead of last year on this date. The spring wheat crop is 80% emerged. The latest USW Harvest Report can be found here.

 

Commercial Sales

  • This week’s commercial sales for the marketing year 2020/21 were up slightly from last week to 33,300 metric tons (MT), in line with trade expectations of 25,000 MT to 100,000 MT. Year-to-date commercial sales for delivery in 2020/21 total 25.6 million metric tons (MMT), 5% lower than last year. USDA expects the total 2020/21 U.S. wheat exports to reach 26.2 MMT, even with the previous year if realized.
  • This week’s commercial sales for delivery in 2021/22 totaled 398,300 MT. Total U.S. wheat sales to date for 2021/22 are 4.34 MMT.
  • View the most recent USW Commercial Sales report here.

U.S. Drought Monitor

  • Regions of Texas and Oklahoma continued to receive rainfall this week, eliminating areas of dryness throughout the region. Temperatures across the Plains and south into Texas and Oklahoma were below average. Much of the wheat-growing area stretching from North Dakota, including South Dakota, Nebraska, Kansas, and eastern Colorado, received well over average precipitation amounts. However, drought conditions expanded in northeastern Nebraska and southeastern South Dakota. Areas in the west remained dry, with abnormally dry conditions growing in Washington.

  • United States Trade Representative (USTR) Ambassador Katherine Tai spoke with her counterpart in China in an introductory virtual meeting this week. The two top trade officials discussed trade issues between the world’s two largest economies. In 2020, the U.S. and China signed a “phase one” trade deal. The USDA raised its forecast for U.S. agriculture purchases in the 2021 fiscal year by $3.5 billion to a record $35 billion. China has purchased record amounts of agricultural goods from the United States this year, including 3.2 MMT of wheat. Ambassador Tai said that her review of the U.S.-China trade relationship is ongoing.
  • Algeria’s president is urging his government to increase durum wheat production while reducing soft wheat imports. Algeria is a leading wheat importer relying primarily on French wheat from their Mediterranean neighbor. In a statement to his cabinet, the president noted the “necessity to adopt” scientific methods to raise cereal production.
  • Farm group Argentine Agrarian Federation (FAA) warned that a recent protest by cattle ranchers could expand to include grain producers. Argentine cattle ranchers blocked the sale of beef in protest of the government’s ban on beef exports. The export ban is an effort to curb inflation. The president of the farm group said that more protests might follow, and this time include cereal producers.
  • Exports of French soft wheat outside of the European Union (EU) fell to their lowest in a decade last month. In May, soft wheat exports outside the EU and United Kingdom were 273.6 TMT, the lowest level since 2009/2010. Exports in May were down nearly 60% compared to April.
  • Russia’s deputy prime minister said that the new formula-based grain export tax would remain in place if increased global demand for food remains. The new tax will update each week, complicating forward sales, according to traders. The tax is calculated from a formula that weighs the floating index price calculated by a panel of industry experts and published by the Moscow Exchange (MOEX). Exporters are responsible for 70% of that difference. This week, for example, the floor price is $200/MT and the seven-day average index price published by MOEX is $241.78/MT. Therefore, the June 9-15 export tax is $29.40/MT.

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, dropped 8% on the week to end at 2,472.
  • The U.S. Dollar Index increased slightly from last week’s 90.02 to close at 90.15.