Increased estimates for 2020/21 Australian and Canadian wheat production and Russian wheat exports (see below) pressured all wheat future prices from two weeks ago.
StatCan, released its last estimates for Canadian productions.
They pegged Canada’s wheat crop at 35.2Mt, which is above surveyed ideas tending slightly under the mid 34s.
The production of durum wheat is seen at 6.6 Mt, slightly above expectations.
This is a significant increase compared to 5 Mt recorded last year.
The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) infact, predicts the country’s 2020/21 wheat harvest will reach 31.2 MMT, up 10% from the September estimate and the second-highest on record.
According to, SovEcon, an agriculture consultancy, upped Russia’s wheat export estimate by 1 MMT to 40.8 MMT on record-high shipments pace (thanks, EU!) and bigger crop number.
This is just marginally below the 2017/18 maximum of 40.9 MMT.
So, some livestock companies and other domestic consumers are calling for an export tariff on wheat exports to further pressure market prices, but the move is not favored by Russia’s union of grain exporters and has little support from the ministry of agriculture, reported Reuters.
But, the Russian agriculture ministry is considering expanding its grain export quota for the latter half of 2020/21 from 15.0 MMT to 17.5 MMT, Reuters referrers.
The quota was implemented to stabilize domestic wheat prices after recent price increases despite this year’s substantial harvest.
In the meantime, Russian farmers have planted 19.3 mln ha of winter crops, a new record-high, and +1.1 mln ha YoY.
That’s mainly wheat but also other winter crops.
But the ongoing dry weather and dry forecasts, in some area Black Sea, has seen Russia’s state Hydromet peg poor-rated crops there at 22pc of total acreage, the highest in a number of years.
Infact, last week, the statal Agro-Meteorological Service reported that 4.28 Mha of the winter sowing area, are in poor growing conditions and 2.42 Mha of the winter sowing area, has not emerged from the ground.
This situation had not been seen in the last 20 years.
So, the areas with crops in good conditions is under 50%, that usually reaches 65% at the beginning of winter.
However, Russian private analysts remain confident for the moment, envisaging a 2021 wheat harvest above 75 Mt, notably thanks to the increase in surface areas.
As of Nov. 30, 46% of the U.S. winter wheat crop (HRW, SRW, fall-seeded SW) for harvest in 2021 is in good to excellent condition, up 3 points from last week on favorable rainfall across parts of High Plains (see below) but down 6 points from this time last year on poor soil moisture levels across the Great Plains.
This week’s commercial sales of 446,000 metric tons (MT) for delivery in 2020/21 were down 44% from last week’s 796,000 MT but within trade expectations of 250,000 MT to 700,000 MT.
Year-to-date commercial sales now total 18.5 million metric tons (MMT), 12% ahead of last year’s pace.
USDA expects the United States will export 26.5 MMT of wheat in 2020/21, up 1% from last year, if realized.
As of Dec. 3, Argentina’s wheat harvest is nearly 40% complete, up 9 points on the week but 6 points behind this time last year.
The Buenos Aires Grain Exchange (BAGE) reports the national average yield at 24.0 bu/acre (1.62 MT/ha) and the total 2020/21 wheat production forecast is unchanged at 16.8 MMT.
This week, in San Lorenzo Argentina’s agro-industrial hub, activity halted at grain-processing plants in due to union strike. The center concentrates about 80% of the agricultural exports of Argentina.
So, CBOT March Soft Red Winter (SRW) futures fell 24 cents to end at $5.75/bu.
KCBT March Hard Red Winter (HRW) futures lost 16 cents to close at $5.43/bu.
MGE March Hard Red Spring (HRS) futures slipped ten cents to end at $5.50/bu.
PNW soft white (SW) export prices jumped on the week due to higher replacement values in the countryside.
IGC cut world corn production and upped trade, so carryover in large exporters down from 70MMT to 58MMT, the lowest since 15/16.
However, CBOT March corn futures fell 8 cents to close at $4.20/bu.
Despite lack of bullish new corn remains in uptrend.
South American weather maps, have continued wetting some, with the last runs filling in spots in central Mato Grosso that were on the lighter edge in previous models.
Broker StoneX, has estimated soybean production for Brazil at 133.9 Mt, while other analysts believe that recent rains are still insufficient to break the 130 Mt level.
The main question will be whether China’s purchases seen in recent months will continue in 2021, or whether demand will slow down as stocks are replenished and prices remain high.
So, CBOT March soybean futures lost 16 cents to end at $11.65.
Below, we can see the IGC price indices corn and soybean from October to November 2020.
On logistic cost, increasing elevation capacity reduced Pacific Northwest (PNW) HRS and HRW export basis and Gulf HRW export basis for January and February deliveries.
Gulf and PNW HRS and HRW export basis for March and forward deliveries also fell significantly on the week.
The Great Lakes – St. Lawrence Seaway System will be closed from early January to mid-March 2021.
The Baltic Dry Index (BDI), an assessment of the average cost to ship raw materials like grains, coal and iron ore fell 3% this week to end at 1,189.
The U.S. Dollar Index fell from last week’s 91.79 to close at 90.71.
