Agricultural News
US Wheat Associates Report Shows Wheat Futures Up This week
Fri, 15 Apr 2022 08:23:37 CDT
Wheat futures were up this week. CBOT soft red winter (SRW) futures were up 45 cents to close at $10.96/bu. KCBT hard red winter (HRW) futures were up 48 cents to end at $11.54/bu. MGE hard red spring (HRS) futures were up 17 cents to close at $11.44/bu. CBOT corn futures were up 22 cents to $7.90/bu. CBOT soybean futures were down 7 cents at $16.82/bu.
U.S. futures exchanges will be closed on April 15 in observance of the Good Friday holiday.
Basis this week was flat in both the Gulf and Pacific Northwest (PNW). Only soft white (SW) prices saw a slight decrease for nearby delivery. Despite higher futures this week and sluggish export sales, basis has remained firm. Wheat export logistics continue to encounter problems adding
The USDA crop progress report for this week ranked winter wheat as 32% good or excellent, up 2 points from last week, but far behind last year's 53% rating. Winter wheat rated as fair was 32% and winter wheat rated poor to very poor was 36%. Winter wheat headed was 5%, 1 point below the 5-year average of 6%. Spring wheat planting is underway with 6% planted compared to 10% this same week last year and 1 point below the 5-year average.
According to the USDA 69 percent of total U.S. winter wheat production is in an area experiencing drought including HRW, SRW and SW. This includes 82% of the production area in Kansas, 82% in Colorado, 99% in Texas, and 99% in Montana.
Commercial Sales
Net U.S. wheat commercial sales of 96,100 metric tons (MT) were reported for the week ending on April 7 for delivery in 2021/22, down 39% from last week's 156,300 MT and below trade expectations of 100,000 MT to 250,000 MT. Year-to-date commercial sales for delivery in 2021/22 total 19.2 million metric tons (MMT), 23% lower than the same time last year. USDA expects 2021/22 U.S. wheat exports will total 21.36 MMT, 21% lower than last year if realized.
Net sales for delivery in 2022/23 were 225,217 MT this week.
US Drought Monitor:
Across the lower Plains states the week was dry except for eastern Oklahoma, the only area free of significant dryness. Parts of Texas have recorded only 2% of average rainfall and in west Texas, less than 10% of average precipitation has been observed. Oklahoma has received less than 25% of normal rainfall. Low humidity and strong winds have only made conditions worse. Northwestern South Dakota and a small portion of eastern North Dakota received significant rain this week, as did northwestern Nebraska. In the western region of the U.S., it was another dry week with no improvements recorded to dry conditions in wheat growing areas.
Global Wheat Reports
FranceAgriMer, a French farm agency, raised its forecast for 2021/22 French soft wheat exports to 17.7 MMT. The increase is mostly for countries inside the European Union (EU); exports outside the EU were reduced. They also released crop progress reports for French soft wheat and durum. Soft wheat is rated 92% good to excellent while only 1% is rated poor. Durum wheat is rated 85% good or excellent and only 1% poor.
German farm group DRV revised up its 2022/23 grain output to 43.6 MMT, a 1% increase from earlier estimates. DRV cited good weather following heavy rainfall this month for the increase. Still the group noted rainfall is below average and more will be needed. Wheat production in Germany is forecast at 22.7 MMT, up 6.2% compared to last season.
China's Ministry of Agriculture announced the winter wheat crop had improved more than expected. The ministry noted first and second grade wheat production was average with normal levels. Heavy rain in the fall delayed planting. The ministry warned that strict lockdowns to prevent the spread of COVID-19 could keep farmers from accessing their fields and cut off needed supplies for farmers ahead of harvest.
World food prices were up nearly 13% in March according to the Food and Agriculture Organization's (FAO) food price index. The food price index averaged 159.3 points compared to the February record of 141.4. The cereal price index was up 17%. FAO also reduced its worldwide wheat production projection from 790 MMT to 784 MMT after factoring in a possible 20% loss to Ukraine's winter wheat production.
Morocco's agriculture minister said that the North African country would likely lose 53% of its cereals harvest after experiencing the worst drought in decades. Rainfall was 41% below average this season. Moroccan farmers planted 3.5 million hectares of cereals this season, 44% was soft (non-durum) wheat and 24% was durum. Only 21% of the crop was rated good while 16% was average. The state grains agency ONICLE said that it would gradually build up its wheat stockpiles because of the smaller domestic supply.
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 4% on the week to end at 2,137.
· The U.S. Dollar Index increased from last week's 98.86 to close at 99.85.
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