October 5, 2018

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  • U.S. wheat futures ended the week higher with support from harvest delays in Canada. A strengthening U.S. dollar limited gains. CBOT December wheat futures ended the week 12 cents up at $5.21/bu, KCBT added 13 cents to $5.24/bu and MGEX gained 18 cents to $5.91/bu. CBOT December corn rose 12 cents to $3.68/bu and CBOT January soybeans added 23 cents to $8.82/bu.
  • With cold weather settling in across the U.S. Northern Plains, farmer selling of hard red spring (HRS) was limited and supported export basis across the United States. Steady export demand and limited farmer selling of other U.S. classes of wheat left export basis mostly unchanged week-over-week.
  • USDA’s weekly Export Sales Report included net wheat sales of 435,300 metric tons (MT) for marketing year 2018/19. Total known outstanding sales and accumulated exports of all classes of wheat for the 2018/19 marketing year were 11.3 million metric tons (MMT), 19% behind last year’s year-to-date total of 14.0 MMT. USDA expects 2018/19 U.S. wheat exports to reach 27.9 MMT.
  • On September 30, USDA reported U.S. spring wheat harvest was complete. U.S. winter wheat planting is 43% complete, slightly ahead the 5-year average of 40%. Winter wheat is 14% emerged, in line with the 5-year average.

U.S. Drought Monitor

  • The October 2 U.S. Drought Monitor noted that much of the eastern United States received heavy rain the final week of September. A Canadian cold front brought below normal temperatures from the end of September to the first week of October for Montana and the Dakotas but provide no significant improvement to dry conditions. Drought conditions in the Pacific Northwest (PNW) continue to expand and worsen.

  • Cool, wet weather continued to delay spring wheat harvest in Canada’s western provinces. The Saskatchewan weekly crop report reported winter wheat harvest there is unchanged week-over-week at 99% complete; durum harvest is 84% complete, up from 78% last week; and spring wheat harvest is 58% complete, up from 50%. In Alberta, spring wheat harvest is 42% complete, significantly behind last year’s pace.
  • Bolsa de Cereales, the Buenos Aires Grain Exchange, reported 46% of wheat acres had below normal or poor soil moisture. Hail and frost damage are limiting yield potential and Bolsa noted that 42% of Argentine wheat is in good to excellent condition.
  • Reuters reported Ukraine farmers have planted 63% of grains, roughly 4.54 million hectares (10.3 million acres) of winter grains.
  • Australia received beneficial moisture this week but drought conditions remain severe according to the Australian Bureau of Meteorology.

Baltic and U.S. Dollar Indices

  • The Baltic Index increased to 1554, up from 1540 the week prior.
  • The Dollar Index increased to 95.70 this week, up slightly from 95.13 last week.

Due to increased demand for higher protein SW and the low average protein levels of the 2018/19 crop, the USW Price Report now shows a min 9.5% protein premiums (currently about a 20 cent per bushel premium to max 10.5% SW prices) and no longer shows an unspecified protein level. Unspecified protein SW has priced equal to max 10.5% SW for the last several months. USW will continue to monitor market conditions and make changes to the report as necessary.

 

Source: U.S. Wheat Associates