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Market Review
Weekly Market Recap August 27, 2010
Hard Red Spring Wheat
Spring wheat futures have seen mixed trading this week, but did finish the week higher. The market seems to have adjusted to the Russian situation, but higher than expected export sales continue to help support the market. Over the past month, U.S. export sales have been higher than average. The most recent weekly sales report showed 40 million bushels in sales, including some to Egypt as that country looks to other sources due to the lack of exports from Russia. Total U.S. exports and sales have reached 40 percent of USDA's estimate of 1.2 billion bushels. The U.S. HRS harvest is over half done and early reports indicate strong yields and protein that is about one percent higher than 2009. The market will continue to watch the harvest progress and quality and world production factors.
Durum
Durum cash prices around North Dakota are averaging around $4.75. Harvest of the Northern durum harvest is behind average with only 19 percent of the North Dakota crop and 9 percent of the Montana crop harvested, compared to average values of 40-45 percent. No widespread quality data is yet available. Exports continue to be strong having reached 19 million bushels, compared to 13 million last year. USDA expects 55 million bushels in sales for 2010-11.
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Weekly Market Recap August 6, 2010
Hard Red Spring Wheat
Spring wheat futures prices continued their unusual pre-harvest climb this week due to continued concerns about the drought affected crop in the Black Sea region. The rumors became fact on Thursday when the Russian government announced they would be temporarily banning grain exports beginning August 15 and lasting until December. Export contracts out of the Ukraine have been cancelled as well. Russia was the fourth largest wheat exporter last year after the U.S., EU-27 and Canada, so there is a significant amount of wheat purchases that will have to be sourced from different locations. Even with Russia out of the market for the time being, world wheat supplies are still adequate to meet demand, after three years of good crops and a buildup of stock levels. In the U.S. especially supply levels are more than adequate. The market will likely be volatile as it sorts out the situation, as was seen with yesterday's almost limit up move and today's corresponding limit down close. Export sales this week were again strong at over 31 million bushels. Harvest of the spring wheat crop began in earnest this week and yields so far are reportedly high and protein levels appear to be better than last year.
Durum
Durum prices are starting to follow the lead of other classes of wheat in terms of price, but not nearly to the extent that the other classes have seen over the last month. Durum prices around North Dakota are in the $4.50 to $4.80 range, an improvement of about a dollar compared to a few months ago. Durum production estimates for some countries including Kazakhstan, Syria and the European Union have fallen in the last month due to various weather related issues, but supply levels still appear to be adequate. The Northern durum harvest has not yet begun, but yield and quality potential is high, although producers need to get it harvested and in the bin first. Export sales were slightly disappointing for U.S. durum this week as a large sale to Italy was cancelled.
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