Friday, September 2, 2021
- Futures were mixed this week. CBOT soft red winter (SRW) futures were down 4 cents to close at $7.14/bu. KCBT hard red winter (HRW) futures were up 3 cents to end at $7.15/bu. MGE hard red spring (HRS) futures lost 21 cents to close at $9.15/bu. CBOT corn futures were down 50 cents to $5.08/bu. CBOT soybean futures were down 76 cents to close at $12.83/bu.
- Basis in both the Gulf and Pacific Northwest (PNW) was firmer this week as the damage from Hurricane Ida, which hit the Gulf this week, was still being absorbed.
- This week, U.S. Wheat Associates (USW) published its final Harvest Report for 2021. HRW composite grade is No. 1 with 11.9% (12% moisture basis) protein on average. USDA reported 88% of the U.S. spring wheat crop harvested by Au. 30 and industry sources report better than expected yields. Composite protein of 15.4% (12% mb) in this No. 1 DNS crop is well above the 5-year average SW composite grades as No. 2, with high protein, low moisture and lower test weight values reflecting extreme heat and drought conditions. Read the latest USW Harvest Report here.
- Traders made no offers again this week for HRW 12.5% protein exported from the Gulf. Total U.S. SW 9.5% max protein offers were also limited this week. Please contact your supplier or local USW office for more information.
Commercial Sales
- This week’s U.S. wheat commercial sales of 295,300 MT were up significantly from last week’s 116,000 MT and in line with trade expectations of 200,000 MT to 450,000 MT. Year-to-date commercial sales for delivery in 2021/22 total 9.4 million metric tons (MMT), 24% lower than last year at the same time. USDA expects total 2021/22 U.S. wheat exports will reach 23.8 MMT, 12% lower than last year, if realized.
- View the most recent USW Commercial Sales report here.
U.S. Drought Monitor
- Areas of the Central and Northern Plains states received beneficial rainfall this week, an encouraging sign for seeding the 2022 HRW crop. In the west, dry conditions persisted, with 90% of the region in some level of drought.
- Hurricane Ida damaged two U.S. grain export elevators when it made landfall in Louisiana Aug. 29. The hurricane struck in the Gulf of Mexico where the Mississippi River, a major artery for moving grain shipments from the Plains and Midwest states, and Gulf meet. Cargill said one of its terminals received “sustained significant damage” and confirmed some damage to a second terminal. Power outages persist at center Gulf facilities. Western Gulf export facilities in Texas remain in operation.
- In their initial crop production report published on August 30, Statistics Canada estimated that the all-wheat harvest will be 22.9 MMT, down 35% from last year and slightly bigger than trade expectations of 22.6 MMT. If realized, the crop will be its smallest in 14 years. Canadian crop exports are forecast to plummet 39% this year, according to Agriculture Canada. Total exports of grains, oilseeds, pulses and specialty crops is forecast at 36.0 MMT, down from 59.0 MMT last year, making it the smallest export amount since 2006/07 if realized.
- Ukraine’s agriculture ministry says that total grain production including wheat is likely to set a record this year at 80.6 MMT reported Reuters. The ministry added that 60.68 MMT of grain could be exported, including 32.0 MMT of wheat with 60% of that milling quality. Last year Ukraine exported 16.6 MMT of wheat.
- Russian wheat exports picked up pace last week ahead of a $7.70 increase in the export tax on September 1. For the week of August 26, Russia exported 1.6 MMT, twice the volume of the week before. For the whole year, Russia has exported 6.2 MMT of wheat, 13% below last year’s volume exported by this time
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, decreased 7% on the week to end at 3,944.
- The U.S. Dollar Index decreased from last week’s 92.72 to close at 91.41.