Ray Grabanski, Progressive Ag
Wheat The wheat market finally saw some buying this week after heavy deliveries pushed contracts to multi-year lows. Based on longer term nearby monthly continuation charts, the Kansas City market hit its lowest point since January 2006 and Minneapolis hit its lowest point since September 2009. For reference, the same continuation charts showed the U.S. dollar trading around $89 in January 2006 and $77 in September 2009.
Wheat The wheat market continued its slow downward bleed as harvest pressure pushed Minneapolis contracts to new lows each day this week despite respectable export pace. Matif wheat futures matched their recent contract low of $165.50 per metric ton September. The U.S. dollar resumed its uptrend from a weekly low of $97.37 to the $98.39 level. The Canadian dollar showed a downside reversal in Aug. 27 trade, but seems supported at the .7500 level. If it breaks under .7500, this will give Canadian spring wheat exports a leg up on the U.S.
Wheat Matif wheat futures hit a 16-month low at $165 per metric ton for September. The Russian ruble reached a six-month low, which is pushing Matif futures lower to give Europe a better shot at exports versus Russia. Essentially, it's been a race to the bottom the past month for the lowest offers despite lower Russian export and yield estimates. SovEcon estimates Russian wheat exports for July and August at 6.5 million metric tons, 25% below last year's brisk pace. The U.S. dollar traded sideways in a narrow range for the week between at $98 to $98.25.
Wheat The wheat markets were generally lower on the week with the exception of Chicago as spreading became the main feature. The funds are apparently buying Chicago and selling the Kansas City spread on anticipation of further declines to the soft red crop production estimates. The previous wide point of the spread was about 72 cents before narrowing to about 55 but now it has widened further to 80 cents. The sour tone started with Egypt tendering for wheat with no U.S. wheat being offered. Ukraine and Russia were the lowest bids.
Wheat The U.S. dollar traded 60 points higher after the Federal Reserve announced it would cut interest rates. As expected, the rate was cut a quarter of a percent.
Wheat The spring wheat tour completed its three-day trek across North Dakota and western Minnesota. Final yield was 43.1 bushels per acre, up 2 bushels per acre from last year's 41.1 bushels per acre. The tour sampled 356 fields. Durum yields were 7.3 bushels per acre lower than last year at 32 bushels per acre. Durum acreage declined 37% this year and scouts noted the smaller sample size. Scouts also noted that maturity is roughly one to two weeks behind normal.
Wheat The wheat complex continued its downward trend with continued harvest pressure in the winter wheat areas and a quiet export market. $5 support in Chicago failed with new support in the $4.85 range, while the $5.20 level in Minneapolis and the $4.30 level in Kansas City held. Matif Wheat futures were 2.0% lower to $174.75 per metric ton September with support at $173 per metric ton.
Wheat The wheat complex enjoyed an explosive day in July 11 trade with notable cuts to world production estimates in the monthly World Agricultural Supply and Demand Estimates report. U.S. ending all wheat stocks for 2019-20 were 1 billion bushels versus 1.038 billion bushels as the average trade guess. All wheat production is estimated at 1.921 billion bushels versus the 1.905 billion bushels average estimate and 1.903 billion bushels in the June report.
Wheat Stats Canada released its Principle Field Crop Areas report June 26th. All wheat acres planted are 24.6 million acres, down 0.6% from 2018. Trade was expecting 25.7 million acres. Spring wheat increased 8.4% to 18.8 million acres and durum declined 20.9% to 4.9 million acres. Barley acreage increased 14% to 7.4 million acres and oats primarily planted in Saskatchewan increased 18% to 3.6 million acres.