Wheat Outlook September 9, 2017 Volume 26, Number 56

Size: px

Start display at page:

Download "Wheat Outlook September 9, 2017 Volume 26, Number 56"

Polly Bryant
5 years ago
Views:

The five-year average for this week of the season is 78% harvested.

Grains Annual Summary on September 29 th.

1 Today s Newsletter Market Situation Crop Progress 1 Weather 2 Grain Use 4 Commitment of Traders 5 Marketing Strategies 218 Wheat Marketing Plan 7 Market Situation Crop Progress. Spring wheat harvest has reached 89% according to this week s Crop Progress from USDA. The five-year average for this week of the season is 78% harvested. USDA is currently surveying small grains producers and will provide updated production estimates in the September WASDE on the 12 th and Small Grains Annual Summary on September 29 th. The global crop monitor from GEOGLAM shows mixed conditions for wheat around the world: good to exceptional for much of Russia and Kazakhstan to poor in the U.S. Northern High Plains. In the Southern Hemisphere, much of Australia has been dry and wet weather is a concern for early wheat development in Argentina. Upcoming Reports/Events 8 1

2 Weather. Persistent drought conditions remain over much of the Northern High Plains. The portions of Iowa rated as extreme drought held about steady this week with some relief in the northwestern part of the state. Conditions improved somewhat in eastern South Dakota and held about steady in Nebraska. As fall wheat seeding begins, much of central Kansas is in moderate drought. 2

Hurricane Irma is the dominant feature of both the

week. Cooler than normal temperatures will accompany

3 Hurricane Irma is the dominant feature of both the precipitation and temperature outlook for the next week. Cooler than normal temperatures will accompany heavy rainfall all across the southeast and into the eastern Corn Belt. Precipitation Forecast ( Days 1-3 Days 4-5 3

4 This week s Oceanic Nino Index from the Climate Prediction Center shows a moderate dip into La Nina territory late this fall and early winter before turning back to neutral conditions in early spring. This week s temperature deviation reading was -.2 C from normal, the same as the trimonthly reading for June/July/August. ENSO Alert System Status: Not Active ENSO-neutral conditions are present. Equatorial sea surface temperatures (SSTs) are near-to-below average across the central and eastern Pacific Ocean. ENSO neutral is favored (~85% chance during Jul-Sep, decreasing to ~55% during Dec-Feb) through the Northern Hemisphere winter C Oceanic Nino Index (ONI) Actual Measurements Predicted 1. El Nino.5 Neutral. -.5 La Nina -1. Latest actual weekly SST departure OND NDJ DJF '17 JFM FMA MAM AMJ MJJ JJA JAS ASO SON OND NDJ DJF '18 El Niño/Southern Oscillation (ENSO) Diagnostic Discussion, September 4, JFM FMA MAM Grain Use. All wheat export sales for the week of August 31 were 14 million bushels and the total so far this marketing year, 458 million bushels. This number is 47% of the projected marketing year total. Normally by the end of August, 45% of the yearly total is on the books. The biggest sales recorded for this week were Korea, Nigeria, Japan, and the Philippines. Mil bu 1, 217/18 U.S. All Wheat Export Sales Commitments Projected MY Total Cumulative Net Sales Top Importers, Current MY, mil bu. Mexico 59 13% Phillipines 54 12% Japan 44 1% Korea 38 8% Nigeria 26 6% Indonesia 22 5% Taiwan 21 5% China 2 4% Thailand 16 3% Weekly Net Sales Sales pace to reach target: 14 Export Sales Commitments for the week 8/31/217: 14 million bushels Total Export Sales Commitments this marketing year: 458 million bushels 47% of the 217/18 MY Export Sales Target of 975 million bushels (August WASDE) Normal sales commitments by the end of August: 45% USDA, Foreign Agricultural Service: September 8, 217 4

5 The Texas Gulf is the second largest exporting region for wheat in the U.S., behind the Pacific Northwest. The Texas Gulf accounted for 2% of all U.S. wheat exports in 216. Hurricane Harvey brought a halt to all rail traffic along the coast and the Port of Houston closed Friday August 25th. The port reopened on a limited basis on September 1. Export inspections had been running at about the same level as last year and the five-year average right up to the storm. For the first reporting week after the storm, August 31, export inspections were. 1, bu 3, Wheat Inspected for Export Texas Gulf 25, 2, 15, 1, 5, 6/1 6/15 6/29 7/13 7/27 8/1 8/24 9/7 9/21 1/5 1/19 11/2 11/16 11/3 12/14 12/28 1/11 1/25 2/8 2/22 3/8 3/22 4/5 4/19 5/3 5/17 end of MY 5-yr avg 216/17 217/18 U.S. Dept. of Agriculture, Agricultural Marketing Service. Grain Transportation Report. September 7, 217 Commitment of Traders. Money managers were generally more bearish in their holdings in grain this week, still net short but somewhat less bearish in beans. The positive price movement this week is due to the nearby contracting rolling over from September to December for corn and wheat and the wide spread between futures contract prices. Managed Money, net long positions 15-Aug 22-Aug 29-Aug 5-Sep weekly contract change weekly price change Corn 28,885 (26,23) (63,532) (13,898) (4,366) 25. Soybeans (22,651) (35,295) (32,677) (12,529) 2, Chicago Wheat (36,337) (68,79) (7,126) (79,685) (9,559) 4.25 KC Wheat 34,494 23,334 17,516 14,67 (2,99) Total 4,391 (16,774) (148,819) (181,55) (32,686) 5

6 Speculative Investment in Corn Contracts Price, /bu 35, 37. 3, , 35. 2, , 33. 1, 32. 5, Aug Aug Aug-17 5-Sep-17 Long Short Price Speculative Investment in Chicago Wheat Contracts Price, /bu 2, 46 18, 44 16, 14, 42 12, 4 1, 38 8, 36 6, 4, 34 2, Aug Aug Aug-17 5-Sep-17 Long Short Price Contracts 12, 1, 8, 6, 4, 2, Speculative Investment in Soybeans Price, /bu Aug Aug Aug-17 5-Sep-17 Long Short Price Speculative Investment in Kansas City Wheat Contracts Price, /bu 9, 46 8, 44 7, 42 6, 4 5, 38 4, 3, 36 2, 34 1, Aug Aug Aug-17 5-Sep-17 Long Short Price The basis for Texas wheat continues to run weaker than normal, an indicator that supplies are more than adequate given the current level of demand. For the week of September 7, the average Texas cash wheat basis is -71 cents and the basis at the Texas Gulf +11 cents. Avg TX cash TX Gulf cash-gulf wheat basis export bid basis spread 1-Aug 3.89 (.6) Aug 3.56 (.58) Aug 3.48 (.57) Aug 3.5 (.59) Sep 3.71 (.71) yr September average (.55) USDA, AMS, Market News: TX cash = average (area North of the Canadian River, Triangle Area from Plainview to Canyon to Farwell, area South of a Line from Plainview to Muleshoe) 6

Marketing Strategies 218 Wheat Marketing Plan. We are in the price discovery period when RMA sets the base price for most 218 winter wheat products.

7 Marketing Strategies 218 Wheat Marketing Plan. We are in the price discovery period when RMA sets the base price for most 218 winter wheat products. At current futures prices in the July 218 Kansas City wheat contract, the base price is above last year but still in the lower ranges of the last 1 years. $/bu RMA Wheat Price Base Price Base price setting period: August 15 through September 14 Harvest price setting period: June 1 through June 3 Harvest Price 7

8 I am 2% priced on the 218 crop and expect to add to that total when we get a better handle on acres and yield prospects July 218 KC Wheat and Marketing Plan /bu Early Season Price Rally / Early Crop Conditions Emerging from Dormancy/Late Season Conditions Harvest 7/12/217: Sold 2% at 67½ 5/1/217 5/12/217 5/25/217 6/8/217 6/21/217 7/5/217 7/18/217 7/31/217 8/11/217 8/24/217 9/7/217 9/2/217 1/3/217 1/12/217 1/21/217 1/3/217 11/8/217 11/17/217 11/26/217 12/5/217 12/14/217 12/23/217 1/1/218 1/1/218 1/19/218 1/28/218 2/6/218 2/15/218 2/24/218 3/5/218 3/14/218 3/23/218 4/1/218 4/1/218 4/19/218 4/28/218 5/7/218 5/16/218 5/25/218 6/3/218 6/12/218 6/21/218 6/3/218 7/9/218 Upcoming Reports/Events. Registration now open for Master Marketer, brochure available at: Registration now open for TEPAP, brochure available at: September 12 September 29 September 18-2 October 2-3 October October 3-31 Crop Production and WASDE Small Grains Summary Master Marketer, Castroville, Texas 8

9 Mark Welch, Texas A&M AgriLife Extension Economist 6 John Kimbrough Blvd, Suite 335 College Station, Texas Tel. (979) Fax. (979) JMWelch@tamu.edu The opinions and recommendations expressed are solely those of the author and are intended for educational purposes only as part of the Texas A&M AgriLife Extension Service. The author and Texas A&M AgriLife Extension Service assume no liability for the use of this newsletter. The Texas A&M AgriLife Extension Service provides equal access in its programs, activities, education and employment, without regard to race, color, sex, religion, national origin, disability, age, genetic information, veteran status, sexual orientation or gender identity. The Texas A&M University System, U.S. Department of Agriculture, and the County Commissioners Courts of Texas Cooperating 9

Wheat Outlook July 24, 2017 Volume 26, Number 44

Wheat Outlook July 24, 2017 Volume 26, Number 44 Today s Newsletter Market Situation Crop Progress 1 Weather 1 Grain Use 5 Market Situation Crop Progress. The U.S. spring wheat crop condition index this week is down only one point to 277 with 96% of