January 11, 2019
- Supported by a softening U.S. dollar (see below), which makes U.S. wheat more competitive relative to other origins, and increasing global wheat prices, but tempered by uncertainty over the export sales pace and winter wheat planted area, U.S. wheat futures finished the week mixed. Uncertainty over the pace of export sales and
winter wheat planted area limited gains. Soft red winter (SRW) futures are up week over week, while hard red winter (HRW) held steady and hard red spring (HRS) fell slightly below last week’s close. CBOT March futures closed 2 cents up from last week at $5.19/bu. KCBT ended 2 cents down at $5.04/bu. MGEX lost a quarter of a
cent to remain at $5.70/bu. CBOT March corn futures closed 4 cents down at $3.78/bu. CBOT January soybean
futures closed 11 cents down at $8.99/bu.
- Export basis for HRS and HRW in the Gulf, and export basis for HRS in the Pacific Northwest (PNW) were
unchanged for nearby delivery months on minimal farmer selling and relatively steady export demand. Slow
farmer selling pressured HRW export basis in the PNW for nearby and deferred delivery months, while continued
export demand over the past two weeks supported soft white (SW) prices through January and February. The
Great Lakes – St. Lawrence Seaway System closed on December 31, 2018 and will re-open in March 2019.
- USDA’s weekly Export Sales Report will not come out again until the agency’s funding is fully restored when the government shutdown ends. However, USDA did publish its weekly export inspections for wheat which totaled 260,134 metric tons (MT), 11% higher than the inspection volume reported during the same time last year.
- The January 11 Drought Monitor reported heavy precipitation across parts of the southern Great Plains for the second week in a row. Dry weather persists across most of the northern and central Great Plains, though areas in North Dakota under “moderate drought” were reduced this week. Looking ahead, more dry weather is predicted for the northern Rockies descending east to the wheat producing regions of the northern Great Plains and upper Mississippi River Valley. Above-average temperatures will accompany the lack of precipitation in these areas.
- The Buenos Aires Grain Exchange, Bolsa de Cereales, reported Argentine wheat harvest is 98% complete, up
from 91% complete as Jan. 4, 2019.
- The European Commission raised its 2018/19 European Union (EU) common wheat production estimate by 1.80 MMT to 129 MMT. However, the Commission’s 2018/19 EU common wheat export estimate remained
unchanged at 20.0 MMT.
- 2018/19 Australian wheat exports will fall to a 10-year low of 10.6 MMT due to drought according to ABARES data.
- Statscan reported Canadian total wheat harvest expected to reach 31.8 MMT, up 6% year over year.
Baltic and U.S. Dollar Indices
- The Baltic Index fell half a percent week over week to 1,189.
- The Dollar Index fell to 95.68, its lowest point since October 15, 2018.
Source: U.S. Wheat Associates