U.S. Wheat Associates Price Report For August 27, Shows All futures closed HigherMon, 30 Aug 2021 08:08:44 CDT
WEEKLY HARVEST REPORT – August 27, 2021
The HRW harvest has officially wrapped up as samples continue to be analyzed in the lab. SW harvest is progressing under
hot, dry conditions and data continue to reflect a stressed crop. HRS harvest is nearly 90% complete and this year’s crop
currently grades at U.S. No. 1 Dark Northern Spring. The first northern durum samples are in with the current grade a U.S. No.
2 Hard Amber Durum.
All futures closed higher this week. CBOT soft red winter (SRW) futures rose 4 cents to close at $7.18/bu. KCBT hard red winter (HRW) futures were up 10 cents to end at $7.12/bu. MGE hard red spring (HRS) futures gained 18 cents to close at $9.36/bu. CBOT corn futures gained 20 cents to $5.58/bu. CBOT soybean futures were up 66 cents to close at $13.59/bu.
· HRS basis in both the Gulf and the Pacific Northwest (PNW) was higher this week due to as soybeans and corn compete for elevation capacity. Higher barge rates added to HRS Gulf basis. HRW basis was also up as export capacity tightened going into the fall.
· HRW harvest is complete. No offers were made for HRW 12.5% protein exported from the Gulf. This week’s U.S. Wheat Associates (USW) Harvest Report on Aug. 27 put average HRW protein content at 11.9%, slightly above the 5-year average. Please contact your supplier or local USW office for more information.
· This week’s Harvest Report showed the current average PNW SW protein to be 11.1%, unchanged from last week’s average but well above the 5-year average of 9.8%. Grain traders remain reluctant to guarantee maximum proteins and total U.S. SW 9.5% max protein offers were limited. Please contact your supplier or local USW office for more information.
· On Aug. 23, USDA reported 77% of the U.S. spring wheat crop harvested, 22 points ahead of the 5-year average of 55%. South Dakota reported 95% harvested, Montana is 85% harvested, Minnesota 98% complete, and North Dakota is 73% harvested. Industry sources report pockets of good quality and better than expected yields. The latest USW Harvest Report can be found here
HARD RED WINTER
• Crop Progress: The 2021 U.S. HRW wheat harvest is complete with the remaining samples in transit to the lab.
• Wheat Data: There are now 505 samples in various stages of testing. With samples from the PNW, moisture, test weight
and falling number values decreased slightly while protein increased to 11.9% (12% mb) and 1000 kernel weight increased
to 30.2 grams. Other kernel factors remained unchanged from last week.
• Dough and Bake Data: Testing has begun on the first 32 composites from Texas, Oklahoma and Kansas. Laboratory baking
analysis of these composites indicate an average loaf volume of 874 cc, above the industry quality target of 850 cc.
Farinograph and alveograph data over those same composites indicate the need for monitoring when mixing; average
bake absorption is good at 62.7%.
• Crop Progress: The 2020 U.S. SW winter wheat harvest is all but complete with less than 10% of the SW spring crop
remaining. Industry sources expect fall seeding to be delayed due to drought conditions.
• Weather: Seasonal temperatures have returned to the Pacific Northwest, but weather remains dry. Growers are hoping
for any moisture as seeding begins for the next winter wheat crop.
• Wheat Data: Composite results from 302 samples now in various stages of testing show the current grade of No. 2 SW
with protein of 11.1% (12% mb) above the 5-year average of 9.8%. The high protein, low moisture and lower test weight
values reflect the extreme heat and drought conditions. For buyers, this will be a good year to better understand SW
protein performance verses protein levels; your local USW representative can help
HARD RED SPRING
• Crop Progress: Widespread precipitation slowed harvest last week into this week. According to USDA, South Dakota is
now 95% harvested, Montana (85%), Minnesota (98%) and North Dakota (73%).
• Crop Conditions: Industry sources report pockets of good quality and better than expected yields, however, bailed fields
• Weather: Scattered showers are forecast, creating potential harvest delays and quality concerns.
• Wheat Data: Approximately 65% of the samples have been collected and analyzed for this week’s report. Test weight
average is holding steady at 61.7 lb/bu (81.1 kg/hl). Current average protein is also holding steady at 15.3% (12% mb), up
from last year’s 14.3%. Falling number average remains above 400 seconds, indicating a sound crop. Average vitreous
kernel content is 87% to make the average grade of the crop at this time U.S. No. 1 Dark Northern Spring (1 DNS).
• Crop Progress: The Northern Plains durum harvest made good progress last week with Montana 70% harvested and North
Dakota 57%. Industry sources report variable yields but good quality.
• Crop Conditions: This week’s crop condition ratings continue to reflect prolonged heat and drought stress; USDA
estimates only 28% of the North Dakota crop and 4% of Montana’s is in good to excellent condition.
• Weather: Cooler temperatures and much needed rainfall are providing relief from the prolonged drought but with more
rain forecast potential quality issues are a concern.
• Wheat Data: Samples came from southwestern North Dakota and northeastern Montana. Low moisture content (10.1%)
and high falling number (412 sec) reflect the dry conditions.
· This week’s U.S. wheat commercial sales of 116,000 MT were down 62% from last week’s 306,700 MT and well below trade expectations of 200,000 MT to 600,000 MT. Year-to-date commercial sales for delivery in 2021/22 total 9.1 million metric tons (MMT), 23% lower than last year at the same time. USDA expects total 2021/22 U.S. wheat exports will reach 23.8 MMT, 12% lower than last year, if realized.
U.S. Drought Monitor
· This week, temperatures were below normal in the western half of the U.S., while east of the Continental Divide, temperatures were generally above normal. Rain was widespread in large areas of Nebraska, South Dakota, Wyoming, and parts of Colorado, leading to improvements in drought conditions for those areas. Rain in North Dakota was needed but slowed HRS and durum harvest. In the PNW, conditions remained dry, adding to concern over moisture deficits as seeding for the next winter wheat crop begins soon.
Global Wheat Reports:
· Belarus has imposed a ban on grain exports for six months, including exports to Eurasian Economic Union (EEU) members. Although there was no official reason given, trade sources speculated it may be intended to stop the re-export of Russian grains without taxes outside the EEU bloc. Belarus has harvested 6.2 MMT of grain this year, a 16% drop compared to last year.
· Russian wheat exports are off to a slower start this year down 21%. Russia usually sells most of its wheat in the first half of the marketing season, which began July 1. However, farmers are holding on to their grain following a smaller-than-expected crop. The export tax, which changes weekly, has also slowed export sales. SovEcon, a Russian-based analytical firm, noted that Russian domestic wheat prices were growing quickly along with increased export prices. SovEcon estimates that in the first two months of the trade season, exports will total 5.3 MMT, down from 7.0 MMT sold by the end of August 2021.
· ANMF, a French flour miller group, said this week that a reduction in the average quality of France’s soft wheat crop would lead to an increase in flour prices The group added that the total volume of flour produced would not change. Rain damage has added to the cost of French soft wheat as test weights and falling numbers have both been much lower than average. The September contract on the Paris Euronext Exchange showed front-month prices at their highest since March 2008.
· On Thursday, the International Grains Council (IGC) cut its forecast for the 2021/22 global wheat crop by 6.0 MMT to 782.0 MMT. The cut was based on diminished outlooks in Russia, Canada, and the United States. Ukraine and Australia both had their production revised upward.
· The Grain Union of Kazakhstan said flour exports to Afghanistan would be “badly hurt” due to a freeze of the Central Bank of Afghanistan’s assets, a steep fall in the currency rate, and the disabling of SWIFT payments. Afghanistan buys more than 60% of the flour exported from Kazakhstan, amounting to about 2.2 MMT of wheat annually.
Baltic and U.S. Dollar Indices
· The Baltic Dry Index (BDI), an assessment of the average cost to ship raw materials such as grains, coal, and iron ore, increased 3% on the week to end at 4,235.
· The U.S. Dollar Index decreased from last week’s 93.58 to close at 92.72.
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