Friday, April 13, 2018

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  • Weather continues to dominate wheat futures, which ended mixed this week. Forecasts for rain across some of the drought-stricken hard red winter (HRW) growing areas pressured KCBT futures lower, but snow and cold temperatures across the U.S. Northern Plains are delaying spring wheat planting and supporting MGEX. CBOT May closed flat this week $4.72/bu, KCBT dropped 11 cents to $4.96/bu, and MGEX increased 10 cents to $6.17/bu. CBOT May corn finished 2 cents lower at $3.86/bu and CBOT May soybeans climbed 20 cents to $10.54/bu.
  • Slow farmer selling, weather-related logistical delays across the U.S. Northern Plains, fog and high water on the Gulf tributary rivers, and limited export capacity for nearby contracts (due to unseasonably high demand for elevation capacity from corn and soybeans) are supporting export basis through June.
  • USDA’s weekly Export Sales Report included net wheat sales of 120,700 metric tons (MT) for marketing year 2017/18. Sales were within trade expectations of 100,000 to 300,000 MT. Total known outstanding sales and accumulated exports of all classes of wheat for 2017/18, through April 5, 2018, were 23.0 million metric tons (MMT), 15% behind last year’s year-to-date total. USDA expects 2017/18 U.S. wheat exports to reach 25.2 MMT.
  • On April 9, USDA rated 30% of the winter wheat crop in good to excellent condition, down from 32% good to excellent last week, and 35% of winter wheat is in poor or very poor condition. USDA reported 3% of winter wheat has headed, in line with the 5-year average. U.S. spring wheat planting is 2% complete, compared to the 5-year average of 6% on the same date. USDA noted planting in Minnesota, Montana, North Dakota and South Dakota has not started.
  • In its monthly World Agricultural Supply and Demand Estimates (WASDE), USDA forecast 2017/18 world wheat production at a record 760 MMT, up 1% from 2016/17. Global trade will reach 182 MMT, 10% above the 5-year average. Global consumption will set a fifth consecutive record at 743 MMT. World ending stocks will climb to 271 MMT, up 6% year over year if realized. U.S. production totaled 47.4 MMT, 19% below the 5-year average.

U.S. Drought Monitor

  • The April 12 Drought Monitor reported below normal temperatures across the U.S. Northern Plains continue to delay spring wheat planting. Drought conditions expanded across the U.S. Southern Plains after storms missed the region. Extreme to exceptional drought now covers 24% of Colorado, 27% of Kansas, 35% of Oklahoma, and the entire Texas panhandle, which are dominant HRW-growing areas. Much needed rain is currently forecast for the U.S. Southern Plains, and more snow is expected across the U.S. Northern Plains, which will keep farmers out of the fields for a few more days.

  • Reuters reported spring wheat planting in Ukraine is 15% complete, up from 2% complete last week, but significantly behind last year’s pace of 76% completion on the same date. Ukrainian farmers are expected to plant 450,000 acres (182,000 hectares) of spring wheat in 2018/19, down 5% from last year, if realized.
  • FranceAgriMer rated 78% of French common wheat in good to excellent condition, unchanged from the week prior.
  • French 2017/18 wheat export logistics could be impacted by rolling strikes by rail workers who are protesting government rail reform, according to FranceAgriMer. French common wheat exports are expected to total 17.2 MMT in 2017/18.

Baltic and U.S. Dollar Indices

  • The Baltic Index climbed to 993, up from 948 last week.
  • The Dollar Index fell slightly to 89.86 from 90.11 last week.

Source: U.S. Wheat Associates