Wheat futures rallied last week, as funds extended technical short-covering and reports of firmer export demand helped futures to climb.
CBOT March 16 futures finished the week at 457 US¢/bu down 16.2 US¢/bu from the previous week.
After a period of dryness which provided support to US wheat futures, rains over the weekend and with more on the near horizon, has put pressure on prices.
The USDA released the first weekly crop progress report for 2016 – the report was bearish for wheat with 59% of US winter wheat crops were rated as in a good or excellent condition, well above last year’s 44% rating. The rating is the highest for this stage in the season since 2010, when 65% of crops were classed as being in a good/excellent condition. US spring wheat is now at 13% planted.
Early forecasts for the 2016 Russian and Ukrainian wheat crops have been released restating concerns for Black Sea production next season. However, these concerns alone do not appear to be large enough to be to have any real effect on pricing.
The Ukrainian state weather centre has reduced the crop forecast by 35% from 2015/16 at 17 million mt. This forecast is based on losing approx. 1 million ha of the winter wheat planted area due to insufficient snow cover over. UkrAgroConsult however are forecasting slightly higher production at 18.5 million mt due to favourable spring weather, this is still far below this season’s crop of 26.5 million mt
Russia has forecast their crop at 57 million mt from 62 million mt this season, a cold weather forecast is expected for April/May, and as a result some growers are expected to reduce the spring wheat area they sow.
US wheat was the cheapest in the latest Iraq tender at US$238/mt CNF (Aussie wheat offered at US$249.75/mt CNF and Canadian at higher levels still!).
To read the full report click the below link