Analysis: Wheat

Canadian Planting Intentions

Apr 21, 3:46 pm | Corn, Soybeans, Wheat

Canadian farmers intend to plant 1.63 Mil more Hectares than last year’s final area, with most of the expansion in oilseeds. Combined canola and soybean seeding intention were pegged by Stats Canada this AM at a record 11.9 Mil HAs, up 1.4 Mil (14%) from last year, and with limited expansion in crush capacity additional supplies will find their way to the world market. ARC does note that cool/wet weather into early May will limit seeding progress, and so weather in May is much more important, but today’s report leans a bit bearish. Canadian wheat seedings at 9.4 Mil HAs are unchanged from last year, and so are slightly higher than expected. Winter wheat seedings in E Canada are down,…

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Wheat Finds Support; Cash Prices Approaching Loan Rate in Plains

Apr 21, 3:40 pm | Wheat

CME contracts ended weaker, but the remainder of the US wheat market finally found some measure of support. ARC highlighted at midday HRW cash prices across the Western Plains are again flirting with loan rates, and are again below the price of corn on a metric ton basis. Plains weather remains highly favorable, but there’s little fundamental reason to justify sub-$4.00 wheat futures until world stocks in 2017/18 can be confirmed at a new record.   US Gulf wheat is still the world’s cheapest origin for nearby delivery, and below $4.20, lower protein Gulf HRW competes with Russia for summer demand. Canadian spring wheat planting intentions are higher than expected at 16.6 Mil Acres, and assuming normal weather Canada’s surplus…

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World Wheat Futures End Weak Again; KC at New Contract Lows

Apr 20, 3:24 pm | Wheat

Funds continue to add to their massive net short position, and very likely now hold a new all-time record short estimated at 155,000 contracts in Chicago. Bullish news is indeed limited to ongoing dryness in Western Europe – where the extended outlook has trended drier – but otherwise there’s just no spark to trigger any massive short covering effort. ARC’s work does suggest that amid increased volatility during summer, better selling opportunities lie ahead, and US Gulf wheat is again the world’s cheapest origin for May-Jun, which is important.   US weekly export sales totaled 15 Mil Bu, a number at the upper end of trade guesses and compared to 11 Mil on this week a year ago. Shipments are…

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World Wheat Markets End Slightly Lower; HRW Weather Favorable

Apr 19, 4:34 pm | Wheat

US futures ended 2-5 cents lower, even spring wheat contracts, and similar activity is noted in spot EU contracts. More rain is offered to the S and C Plains in the next 72 hours, which assures April precip well above normal across OK, KS and parts of Eastern CO. World cash markets mostly followed, through spot Russian offers are firm at $187/MT, vs. comparable Gulf HRW at $178.     There’s little fresh to add: Dryness looks to continue across Western Europe, and ARC fully expects premium to be added to EU cash markets if a wetter pattern doesn’t emerge by early May. Freezing temps have also been recorded in recent days across key areas of Germany and Poland, and…

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EU Wheat Supply & Demand

Apr 18, 4:52 pm | Wheat

Dryness in Western Europe and parts of the Balkan Region is becoming more concerning, as little to no rain is offered to the UK, Spain and France in the next 10 days. Wheat crop’s critical heading stage lies ahead in May and early June. The graphic below displays 30-day percent of normal rainfall, and severe dryness is noted across key parts of France and Western Germany.   Longer term maps look similar, with 60-day rainfall pegged at just 20-50% of normal in pockets of Western Europe. The wheat market hasn’t been overly concerned about EU weather, partially due to record global inventories, and massive surpluses in many other exporting countries (the US, Russia, Australia), but Europe is the one region where…

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Wheat Ends Weak, Near Contract Lows in KC

Apr 17, 4:34 pm | Wheat

US wheat, like corn, continues extract weather premium amid rising crop ratings and ongoing mix of rain and sun projected across the US Plains through the end of April. Weather elsewhere is mixed – too dry in Western Europe, too cold in Canada and the Black Sea – but we do mention a rather sizeable boost in moisture is offered to key areas of Eastern Ukraine and SE Russia through the next 5-7 days.   US winter wheat ratings increased another 1% to 54% GD/EX, vs. 57% a year ago. Measurable upgrades are noted in IL, KS, MO, MT and NE (KS ratings are slightly above last year at 51% GD/EX). Downgrades are noted in NC, OH, OK and OR….

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Wheat Ends Near Unchanged;Corn/Wheat Spreading Featured

Apr 12, 4:49 pm | Wheat

US wheat futures ended mixed. Lite fund short covering is noted, dryness in W Europe continues, but the recent US weather pattern change looks to stay intact throughout late April. Should the forecast verify, additional improvements in US wheat ratings are expected in the next 2-3 weeks, and drought will be further eased across E OK, E KS, AR and MO. April rainfall in Kansas is at left; 2017 data includes the 2-week forecast. Meaningful rain will work across the S Plains in the next 24 hours, and a pattern of lite but lingering shower activity is forecast next week. Precip is no doubt important, but ongoing boosts in soil moisture are also expected to limit excessive heat longer term….

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Global Wheat Market Stable; Western European Dryness Eyed

Apr 10, 3:56 pm | Wheat

US and EU wheat futures ended moderately higher. This is in part due to funds’ near-record short position in the US and in part due to increased attention being paid to dryness across France and parts of Ukraine and S Russia. Better rain is forecast across a majority of Europe and the Black Sea in the 8-15 day period, but so far in spring this pattern change has failed to make in to the nearby timeframe. US crop ratings, however, are just a bit better than expected.   The US winter wheat crop is rated at 53% GD/EX, vs. 56% last year and 49% on average in early April. Noticeable boosts in ratings occurred in AR (74% GD/EX), IL (72%),…

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2016 US Wheat Supply & Demand by Class

Apr 7, 4:35 pm | Wheat

It’s far too premature to adjust ‘17 wheat yields from trend, but following NASS’s planting intentions report, the most probable scenarios for supply and demand by class have been fine tuned. The tables above assume normal abandonment and trend yields, trend domestic consumption, and also a slight decline in export demand. Reduced export interest is forecast as, assuming normal weather and trend yield in Europe, production there is likely to rebound 8-10 MMTs, most of which will find the world export market beginning in July/August.    It’s important to note that stocks of higher protein classes HRW and HRS will be in decline in 2017, and likely subsequent years, while widespread adverse weather or even deeper cuts in acreage are…

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