World production cuts continued this week sending Matif wheat futures to highs last seen in 2014. Ukraine's wheat production is estimated at 24.1 million metric tons down from 27.8 million metric tons by a private firm. Poland estimated their winter wheat crop at 8.4 million metric tons, 16 percent less than a year ago. Germany is expected to harvest 18 million metric tons, down 25 percent from a year ago. SovEcon estimates Russian wheat exports at 35 million metric tons, 10 million metric tons less than last year and 5.1 percent from their previous estimate.

It's the markets job to signal to farmers what it needs for acres. With winter wheat planting just around the corner, the wheat market is clearly buying acres as world production numbers continue to decrease. Given the sell-off in the soybean complex and negative producer margins in oilseeds this may not be a heavy lift. Last year the Minneapolis market bought a million more acres and it's a good thing it did as yields appear to be average in 2018.

$6.00 cash seems to be a number that our northern growers gravitate to and the same is true in the Kansas winter wheat belt. With September 2019 Minneapolis trading $6.45 and July Kansas City trading $6.16, it is more likely for Kansas City to get to the $6.40 area less basis to attract more acres this fall. The thing about it is though, when everybody starts moving one way, the market can say it's done its job and start backing off. I would expect the Chicago and Kansas City markets to hang in there through fall planting, although we could see some harvest pressure in Minneapolis. Minneapolis wouldn't need the acre buy until next spring, but if the winter wheat belt effectively buys more acres this fall, that would certainly limit upside potential.

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A number of analysts think that our exports will improve given the world situation. It's hard to disagree with that. But will Russia give up market share that they have fought so hard to gain in the last few years? U.S. front month wheat contracts are trading in the $5.60 to $6.00 futures range. Will foreign countries buy at these prices, or does the U.S. have to back off some in price to cut into Russia's export share? That question will be answered in weekly export numbers in the coming months. So far we are off to a dismal start for the new marketing year but we could see decent increases for the second half of the shipping season. The U.S. dollar value will also answer this to some degree.

Weekly export sales for all wheat totaled 14.1 million bushels (382,500 metric tons) for the 2018-19 marketing year. Total shipments plus outstanding sales of 264 million bushels are 28 percent below the previous marketing year. Weekly shipments of 14.2 million bushels put total shipments 38 percent below the previous year.

For the week ending August 2, September contracts for Minneapolis wheat were up 18.0 cents at $6.105, up 34.5 cents at $5.605 for Chicago wheat, and up 36.75 cents at $5.6925 for Kansas City wheat.


Corn futures saw a nice start to the week and began with two consecutive days of 5 cent gains. Corn was not the leader as prices were on the way down and is still in follow mode of wheat and soybeans on the way back up. There hasn't been much fresh news on the corn front to get these futures to drastically move on its own. Due to troubles in South America and now parts of Europe, exports should continue to stay strong. A North American Free Trade Agreement deal or even an agreement between the U.S. and Mexico would only strengthen demand outlook. Demand estimates will be looked at closely in the monthly WASDE report on August 10.

August crop reports have been the bearer of bad news in recent years as above trend year yields have been estimated due to early favorable summer weather. Good finishing weather has verified these yields the past few years. The unknown is if needed rains will fall in August this year though. Potential increased demand could help offset the risk of this report.

Weather forecasts continue to show an above normal chance of higher temps in the six to 10 and eight to 14-day outlooks for the majority of the U.S. Moisture possibilities are mixed with the line being the eastern edge of Wisconsin down to the eastern edge of Missouri in the six to 10-day forecast. West of that line is drier than normal and east of this line is still showing slightly above normal moisture possibilities. The eight to 14-day forecase is starting to expand the dry pattern further east to include all of the Corn Belt.

As of July 15, corn crop condition ratings were unchanged at 72 percent good to excellent. The rest of the crop is at 19 percent fair, and 9 percent poor to very poor. Average trade estimates were for mixed at a 1 percent difference in either direction. Corn was 91 percent silking versus 82 percent last year and 82 percent for the five-year average. Corn dough stage was at 38 percent versus 21 percent last year and 20 percent for the five-year average.

Commodity Futures Trading Commission data on July 24 showed the funds staying pat with their net short stance, moving from net short 129,000 contracts to net short 130,000 contracts. For the week ending August 2, December corn was up 5 cents.


Soybean futures saw a nice start to the week before tariff talks put pressure back in the soybean complex. After soybeans saw 28 cent gains on July 31 off the news that U.S Treasury Secretary Mnuchin and Chinese Vice Premier Liu He are back in private talks, soybeans gave up most of those gains later in the week on news that President Trump is once again looking at upping the ante in the tariff war. It is rumored that the White House is proposing to increase the original 10 percent tariff on $200 billion of Chinese goods to 25 percent. This news comes less than a week after it was reported that the U.S. and the European Union came to concessions.

U.S. farmers could receive cash payments from a planned $12 billion aid package as soon as late September, U.S. Agriculture Secretary Sonny Perdue told Reuters. It also promises a trade promotion program to develop new markets.

Soybean crop condition ratings on July 30 were unchanged at 70 percent good to excellent. The trade was expecting an unchanged to 1 percent decline. The rest of the soybeans came in at 22 percent fair, and 8 percent poor to very poor. Soybean blooming is ahead of pace and as of July 29, soybeans were 86 percent blooming versus 80 percent last year and 77 percent for the five-year average. Soybeans setting pods is at 60 percent versus 45 percent last year and 41 percent for the five-year average. This is about a week to 10 days ahead of average.

Weather forecasts added a little precipitation in the central and western Corn Belt for the next seven days. This puts the central Corn Belt near normal precipitation and gives the western Corn Belt some relief but still below normal. The eastern Corn Belt is still forecast for above normal precipitation the next seven days.  The eight to 14-day precipitation forecast is for below normal in all of the Corn Belt. Temperatures are forecast to be above normal in the west, and normal in the east the next seven days. They then warm to above normal temps for all of the corn belt in days eight to 14-day forecast.

CFTC data on July 24 showed the funds adding a few more net short positions, moving from net short 58,000 contracts to net short 61,000 contracts. For the week ending August 2, November soybeans were up 12.25 cents.


For the week ending August 2, November canola futures in Winnipeg were up $2.40 at $496.00 per metric ton Canadian. The Canadian dollar was up .0026 to .7680. This brings the U.S. price to $17.28 per hundredweight.

• Velva, N.D., $15.53 per hundredweight, October at $15.53.

• Enderlin, N.D., $16.23 per hundredweight, October at $16.23.

• Hallock, Minn., $16.07 per hundredweight, October at $16.42.

• Fargo, N.D., $17.00 per hundredweight, October at $16.60.


Cash feed barley bids in Minneapolis were at $2.85, while malting barley received no quote. The Berthold, N.D., bid is $2.50 and the CHS Southwest New Salem, N.D., bid is $2.85.


Cash bids for milling quality durum are $4.80 in Berthold and at $4.95 in Dickinson, N.D.


Cash sunflower bids in Fargo were at $17.65, October at $17.45. For the week ending August 2, soybean oil was down 37 cents at $28.12 on the August contract.