Frontier Agriculture
Member
World markets
US wheat futures suffered sharp losses last week following a barrage of bearish news as crop ratings increased and weather improved. Crop estimates also increased and US exports disappointed with a higher US dollar adding weight to falling values at the end of the week. The Kansas crop tour reported numbers above expectations, estimating the 2016 crop at 382 million bushels versus 322 last year. Although planted acres are lower, yield estimates of 48.6 bushels/acre up from 37 bushels/acre last year make the estimate the second highest prediction since 1996. US crop ratings were 61% good to excellent against 43% last year, with weather mainly warm and dry which will have allowed spring planting to continue through the week. US weekly export sales were 179,000t, down 13% on last year. This week’s WASDE report will give the USDA's first estimates for the US 2016/17 crop and update South American production numbers following recent weather concerns.
Weather in Canada is still dry and contrary to booming stocks in most parts of the world, the latest update from Stats Canada has put wheat stocks at 13.77mmt, down from 18.1mmt last year and the lowest in three years following heavy exports as a result of the weak Canadian dollar. This is in line with expectations. Improved weather forecasts for South America have removed some of the concern around corn crops and the planting window is now open for Argentine wheat, though beans remain the primary focus for now.
Temperatures are starting to warm up in Black Sea regions with crop prospects looking good. Russia is expected to achieve a crop in excess of 62mmt after the warmest winter on record, helped by plentiful soil moisture. There is talk of keeping the export levy in place for another year but with a firmer rouble and high production, this decision is of little importance.
UK market
London wheat closed slightly lower over the week, with Nov ‘16 ending at £117.50/t, down £0.70/t.
OSR market
Tomorrow’s USDA report could have a dramatic effect on the market as updated figures from the 15/16 crop and the 16/17 crop come together. Closing stock figures for 16/17 could be as low as 350million bushels (15/16 expected 426m bushels).
Bean planting is progressing well although a wetter forecast may slow the pace next week. Any production limitation will add to support as there is limited room to reduce the 16/17 stocks.
Although increased volatility can be expected for the moment, there is underlying support in the complex.
US wheat futures suffered sharp losses last week following a barrage of bearish news as crop ratings increased and weather improved. Crop estimates also increased and US exports disappointed with a higher US dollar adding weight to falling values at the end of the week. The Kansas crop tour reported numbers above expectations, estimating the 2016 crop at 382 million bushels versus 322 last year. Although planted acres are lower, yield estimates of 48.6 bushels/acre up from 37 bushels/acre last year make the estimate the second highest prediction since 1996. US crop ratings were 61% good to excellent against 43% last year, with weather mainly warm and dry which will have allowed spring planting to continue through the week. US weekly export sales were 179,000t, down 13% on last year. This week’s WASDE report will give the USDA's first estimates for the US 2016/17 crop and update South American production numbers following recent weather concerns.
Weather in Canada is still dry and contrary to booming stocks in most parts of the world, the latest update from Stats Canada has put wheat stocks at 13.77mmt, down from 18.1mmt last year and the lowest in three years following heavy exports as a result of the weak Canadian dollar. This is in line with expectations. Improved weather forecasts for South America have removed some of the concern around corn crops and the planting window is now open for Argentine wheat, though beans remain the primary focus for now.
Temperatures are starting to warm up in Black Sea regions with crop prospects looking good. Russia is expected to achieve a crop in excess of 62mmt after the warmest winter on record, helped by plentiful soil moisture. There is talk of keeping the export levy in place for another year but with a firmer rouble and high production, this decision is of little importance.
UK market
London wheat closed slightly lower over the week, with Nov ‘16 ending at £117.50/t, down £0.70/t.
OSR market
Tomorrow’s USDA report could have a dramatic effect on the market as updated figures from the 15/16 crop and the 16/17 crop come together. Closing stock figures for 16/17 could be as low as 350million bushels (15/16 expected 426m bushels).
Bean planting is progressing well although a wetter forecast may slow the pace next week. Any production limitation will add to support as there is limited room to reduce the 16/17 stocks.
Although increased volatility can be expected for the moment, there is underlying support in the complex.