RAY GRABANSKI COLUMN: Winter wheat wrapping up
Wheat To start off the week, the market finished sharply lower on spillover from soybeans and corn which both fell limit down. Additional pressure came from lower outside markets and favorable weather conditions which left little for wheat to cli...
To start off the week, the market finished sharply lower on spillover from soybeans and corn which both fell limit down. Additional pressure came from lower outside markets and favorable weather conditions which left little for wheat to climb on. Export inspections were bullish but not enough to out weight the spillover pressure. As we move into the week, pressure will continue as winter wheat harvest wraps up and spring wheat harvest continues to gain speed. Also weather forecasts continue to call for wetter weather by midweek which should add some bearish pressure to spring wheat.
Aug. 5, wheat finished the day sharply higher rebounding after Aug. 4's losses on technical buying. This has been the theme across the board in commodities after the recent trend of commodity wide liquidation. Proving some supportive fundamentals is an export sale to Egypt for 6.4 million bushels of soft red winter wheat.
Aug. 6, wheat closed sharply lower on spillover from falling corn and soybeans and with a lack of fresh bullish news. Minneapolis Grain Exchange saw some support as concerns over spring wheat production continue to buoy prices. Despite gains in the overnight and the need for a technical bounce, wheat fell with other grains, though this underlying support did limited losses.
Aug. 7, the market closed sharply higher because of a technical bounce after recent loses. Strong export sales are supporting the ideas of growing export demand for U.S .wheat, which is providing support for gains. In addition, there is speculation that in the reports for the week starting Aug. 11 USDA will expand their export projection for this marketing year.
Export Inspections were reported to be at 27.4 million bushels. This is above preliminary expectations of 20 million to 26 million bushels. Also this is ahead of the 18.1 million bushels. needed to stay on pace for the marketing year.
In their weekly crop condition and progress report USDA estimated winter wheat harvest progress at 86 percent complete compared to 79 percent for the week ending Aug. 1 and 92 percent for the five-year average. Spring wheat is currently 6 percent harvested compared to 1 percent for last week and 19 percent for the five-year average.
Aug. 4, corn opened lower from the overnight and held the trend for the day as follow through selling and broad based commodity liquidation pressured prices. Also weather added to the downward momentum with the forecast looking favorable for the Corn Belt. The Corn Belt can expect hot dry weather only for the first couple of days this week, and then the forecast is for cooler temps paired with moisture. This should help improve crop conditions and is removing the risk premium added to the market last week on concerns of hot weather. In addition, fund selling and falling crude oil added to the bearish pressure that pushed corn to limit down for the day.
On Aug. 5, the market opened lower from the overnight but then started to trim loses to end up with modest gains by midday. The gains were attributed to technical buying. After a trend of losses lately the market was due for a boost, which pushed the market up despite the lack of fresh bullish news. But with a thin trading volume and not much supporting gains, once traders had taken some profits that market opened back up to selling pressure which pushed prices lower for the day. Pressure also is coming from weather conditions which continue to look favorable and bearish outside markets adding to the downward momentum.
Midweek corn closed sharply lower on bearish fundamentals and spillover pressure. Thursday corn finished sharply higher on a technical bounce after recent loses. Export Inspections were reported to be at 29.7 million bushels. This is well below the 61.2 million bushels needed to stay on pace to reach the projection of 2.45 billion bushels by Sept. 1. Primary destinations were Japan and Korea Republic.
In their weekly crop condition and progress report USDA estimated percent silking to be at 83 percent compared to 59 percent for last week and 91 percent for the five-year average. Corn percent Dough is estimated to be at 17 percent compared to 7 percent for last week and 32 percent for the five-year average. Corn's crop condition ratings remained the same and are estimated to be at 66 percent good/excellent, 24 percent fair, and 10 percent poor/very poor.
Soybeans started off by opening sharply lower from the overnight and held on to that trend for the day, falling to be locked limit down by midday. This downward movement is on carryover selling from Aug. 1 as well as pressure from a bearish weather forecast. The week of Aug. 1 the market added some risk premium to price in the anticipation of hot dry weather this week.
Aug. 5, soybeans climbed throughout the morning, trimming loses on a technical bounce. With a limit lower loses yesterday the market was due for some gains and so traders pushed prices higher on technical selling. Also soybeans were following a similar trend in corn and wheat.
Midweek, the market opened lower from the overnight and continued on that trend throughout the day. Fundamentally, the near term outlook continues to look bearish with favorable weather in the forecast for the next 10 days and with little support from outside markets. A lack of fresh news also contributed to soybeans falling lower for the day. Aug. 7, soybeans finished the day sharply higher on ideas that the market has been oversold recently and is due for a technical boost. Spillover from rallying wheat also helped push soybeans higher for the day.
Export Inspections were reported to be at 7.5 million bushels. This is below the 15.6 million bushels needed to stay on pace for the marketing year that ends on Sept. 1. Primary destinations were Mexico and China. Export sales were slightly above expectations at 22.8 million bushels.
In their weekly crop condition and progress report USDA estimated Soybeans percent blooming is at 78 percent currently compared to 62 percent for last week and 88 percent for the five year average. The percent setting pods is estimated to be at 37 percent compared to 21 percent from the week ending Aug. 1 and 58 percent for the five year average. Soybean's crop condition ratings improved by 1 percent and are now estimated to be at 63 percent good/excellent, 27 percent fair, and 10 percent poor/very poor.
USDA reported no barley shipments or export sales for the week ending Aug. 1. This brings the year-to-date total barley shipments for the year to 1.2 million bushels compared to 680,000 bushels for this time last year As of Aug. 3, 8 percent of the nation's barley has been combined compared to 2 percent last week and 20 percent for the five-year average. Barley's crop condition rating declined again this week. This week's decline was 4 percent as the crop is now rated as 53 percent good/excellent, 34 percent fair, and 13 percent poor/very poor. Harvest results from across North Dakota has the barley crop poor to fair in the western regions of the state but good to very good in the eastern regions of the state. Producers with very poor feed barley and with contracted malting barley should be moving the barley, but if you have average on the verge barley look at holding this in the bin. Barley cash bids in Minneapolis remain at $4 for feed barley and $7.15 for malting barley.
Durum export shipments pace for the week ending Aug. 1 was estimated at 227,000 bushels. USDA also estimated durum export sales pace at 200,000 bushels. This brings the year to date total export sales pace for durum to 9.7 million bushels compared to 19.5 million bushels for last year at this time. As of Aug. 3, 5 percent of North Dakota's durum crop was harvested compared to 2 percent for the week ending Aug. 1 and 5 percent for the five year average. North Dakota's durum crop condition rating improved 1 percent to now be rated at 25 percent good (still no excellent), 39 percent fair, and 36 percent poor/very poor.
Canola futures on the Winnipeg futures exchange closed sharply lower for the week. Losses were enough to push canola down to a four-month low. Again, most of the selling was tied to selling pressure from the sharply lower U.S. soybean complex. Harvest activity is starting to get under way and that in itself will put extra pressure on the canola market as it is a signal that new crop supplies are going to start to become very assessable.
As of Aug. 3, 54 percent of North Dakota's canola crop was turning compared to 39 percent during the week ending Aug. 1 and 68 percent for the five-year average. One percent of the states crop was harvested compared to zero during the week ending Aug. 1 and 3 percent for the five-year average. North Dakota's canola crop condition rating improved 1 percent to now be 53 percent good/excellent, 38 percent fair, and 9 percent poor/very poor.
Cash sunflower bids for Aug. 7 in Fargo, N.D., were at $25.60 for old crop and $22.90 for new crop. North Dakota's producers estimate 36 percent of the states sunflower crop is on bloom compared to 9 percent for the week ending Aug. 1 and 49 percent for the five-year average. The North Dakota sunflower condition rating dropped 5 percent again this week to now be rated at 53 percent good/excellent, 41 percent fair, and 6 percent poor/very poor.