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Articles of Interest- Monday, March 11, 2019

March 11, 2019

Articles of Interest US Wheat Associates

Southeast Asia Returns to Black Sea for New Crop Wheat

S&P Global – 03/11/2019

End-users in Southeast Asia have started purchasing new crop wheat from the Black Sea, three to four months ahead of the harvest, attracted by the recent slump in wheat prices…On March 5, a buyer in Thailand booked two 60,000 mt feed wheat cargoes at $211.50/mt and $210.50/mt CFR liner-out Bangkok for July and September shipment, respectively. The origin is likely to be from the Black Sea, sources said. Buyers in Indonesia have also started purchasing milling wheat from the Black Sea with a deal reported done end-February for a 60,000-mt cargo for 11.5% protein at below $230/mt CFR for August shipment. Since then, global wheat prices have tumbled further, enticing several buyers in the region to book cargoes of new crop. So far, three to four vessels of the Black Sea new crop were heard booked by flour millers in Indonesia.

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Australian Wheat Tanks to 8-month Low on Weak Demand, Stiff Competition

S&P Global – 03/11/2019

Australian Premium White wheat prices tumbled to an eight-month low at $264/mt FOB Kwinana Friday as sellers brought down offer levels sharply in an attempt to attract buyers. The last time the price was assessed lower was on July 25, 2018, at $255/mt FOB Kwinana. The assessment slipped by 11% since its peak of $294/mt FOB Kwinana on January 11 this year. Despite limited availability of APW wheat in the current marketing year, Australian wheat suppliers have lowered their offers in an effort to compete with slashing prices from origins that have already been more competitive in the Asian markets. While the recent slump in prices have caught the attention of end-users that were previously more focused on other origins, strength in purchasing activity is yet to be seen as buyers are contemplating on whether to make some purchases now or wait to see whether prices fall further.

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Global Wheat Output Seen to Rebound 4% from 2018: AMIS

S&P Global – 03/11/2019

Global wheat production in 2019 is expected to rise 4% year on year, with the EU and Russia contributing to most of the growth, Agricultural Market Information System said in its latest report. Wheat output in 2019 is expected to reach 757.4 million mt, up from 728.3 million mt in 2018, according to AMIS — an inter-agency platform that assesses global food supplies and tracks price volatility. In 2017, total world wheat production reached an all-time high of 759.4 million mt, data from AMIS’ Market Monitor report released Thursday showed. The estimates are a joint effort of the Food and Agriculture Organization and AMIS.

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Trump Proposing More Cuts

Agri-Pulse – 03/10/2019

President Donald Trump releases a fiscal 2020 budget that will push yet again for deep cuts in USDA’s budget to help offset higher defense spending, while House Democrats will set the stage for revising expired biofuel tax incentives. Meanwhile, U.S. Trade Representative Robert Lighthizer will be back on Capitol Hill this week, this time to appear before the Senate Finance Committee, where he is likely to be pressed about the administration’s ongoing trade disputes, including the U.S.-China negotiations, as well as Trump’s push to reform the World Trade Organization’s dispute resolution process. Lighthizer’s appearance comes amid reports that the administration may miss its target of having a trade deal between Trump and Chinese President Xi Jinping ready by later this month.

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New Lows for Wheat Ahead of Spring

AgWeek – 03/10/2019

The Chicago and Kansas City contracts are hitting new lows this week. The July hard red winter contract is down 16 percent since the start of February. Minneapolis futures contracts have been hovering at old lows, finally breaking through late in the week. With all this pressure in the wheat markets, it is tough to be optimistic heading into the spring. Most of the time when prices start March lower, the markets tend to continue lower into April and May.
Wheat prices, as mentioned earlier, have trended lower still this week. The market cannot find its legs, as fund managers keep getting shorter. On top of this, wet weather late in the winter has built up great soil moisture reserves in the Central Plains. Though some areas will be struggling with too much water, most will be seeing a boost to eventual production as large moisture reserves tend to bode well for the dry part of the growing season.

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Source: U.S. Wheat Associates

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