Wheat futures closed lower this week as the market shifted concerns from crop production weather concerns in the short term to burdensome stock levels and high prices relative to other competing nations.
CBOT March 16 futures finished the week at 462US¢/bu down 14.6 US¢/bu from the previous week. Prices fell below the 45 day moving average of US$4.69.
The market was pushed back late last week, as the weather forecasts show much less risk of freeze damage in the HRW area and showers forecasted in the back end of the 10 day forecast.
Recent winter wheat crop conditions released by the USDA show 56% of the crop is in good-to-excellent (G/E) shape in Kansas wheat and is jointing earlier than usual, with 6% of the crop in that phase, versus the 5-year average of 2%. Texas wheat conditions gained 4 points on the week, now sitting at 46% G/E. The Texan improvement was a surprise as the moisture remains a concern there and with the early move out of dormancy, farmers and traders are closely watching temperature levels for the next 2 weeks or so in the Southern Plains.
Drought has resumed in the main winter grain growing regions of Morocco. Field reports have seemingly confirmed the negative impact of severe drought on wheat crops, which could mean further export opportunities for the UK.
Although German crops have come through the winter in good condition according to the German association of farm cooperatives, wheat production will fall 1.7% to 26.10 million mt. the reduced levels is seen yields ease back from the very high levels last year.
Canadian wheat stocks will fall to their lowest levels since the 1950’s.The AAFC, Canadian Farm Ministry cut their wheat July 2017 domestic stock levels by 400,000t to 3.70 million mt. The downgrade reflected weaker wheat sowing expectations in the key Prairies region, as farmers switch area to alternative crops with greater returns.
EU soft wheat export forecasts for 2015/16 were revised up by Strategie Grains, the increase driven mainly by higher exports from Poland. Exports of soft wheat are now
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Weekly Report 16_03_19