CBOT March 16 futures finished the week at 478.60 Usc/bu. Down 8.8 USc/bu week on week.
This week the market continued to see consolidation and a bit of short covering, but with no real news wheat continued to push lower for the week. One big factor affecting the trade at the moment is the swaying in the currency market. A weaker Chinese economy and further weakness in oil and base metal pricing is lowering confidence for world economic growth. The US dollar strengthening over 2.6% over the last month which has failed to support wheat pricing.
The US winter wheat crop continues to improve and is now rated at 55% good to excellent up 2% from last week. US winter wheat is at 93% emerged vs 90% a week ago as the crop moves closer to dormancy.
Winter crops in the Western Europe are in good condition as they head into winter. The French winter wheat is currently rated 98% good to excellent vs 93% last year. French winter wheat plantings for harvest 2016 are at the highest levels in 80years according to the French Ministry. The total area of winter wheat planted in France for 2016/17 is estimated at 5.22million ha, 500,000ha up on the year before.
Ukraine has also benefited from recent milder weather, but still nearly 36% of winter crops were rated in poor condition. This is the highest percentage in recent years, last year 18% was classed as poor.
Australian Bureau of Agriculture and Resource Economics and Sciences (ABARES) cut its wheat production forecasts for 2015/16 by over 5% to 23.96 million mt down 1.3 million mt. CBH have also revised the WA grain estimate for this harvest to 12.5 million mt – down from their October estimate of 13 million mt. WA wheat production revised down 14% from the official Australian Government estimate at 7.5 million mt.