Wheat Price Highlights: Futures Down on Harvest Pressure
- All three wheat futures closed lower this week due to harvest pressure and reports of larger crops in the U.S. and Australia, the top two wheat exporters. U.S. winter wheat harvest began last week, weighing on markets. A sharp drop in corn value mid-week also added pressure to wheat markets. The KCBT July saw the largest loss of the three nearby wheat contracts, down 27 cents to $7.12/bu. CBOT July wheat fell 17 cents to $6.81/bu and MGEX July dropped 8 cents to close at $8.12/bu. CBOT July Corn lost 8 cents to $6.55/bu and CBOT Soybeans closed down 11 cents at $15.17/bu.
- In its monthly WASDE update, USDA increased estimated US production by 1 percent to 56.6 MMT. However, estimated world production decreased 5.24 MMT to 696 MMT, due to lower production in Russia, Ukraine and the EU. Projected global ending stocks fell 5.0 MMT from May to 181 MMT.
- On Wednesday, the Australian Bureau of Agriculture (ABARES) increased its estimate for the 2013/14 Australian wheat crop to 25.4 MMT. If realized, it would be 15 percent greater than last year’s output of 22.1 MMT and be the fourth largest crop on record. USDA left its estimate for Australian production unchanged from May at 24.5 MMT.
- USDA reported the first winter wheat harvested area of the year this week, showing 5 percent complete as of June 9. Harvest is well behind last year’s pace of 37 percent complete to date and below the five-year average of 16 percent harvested.
- The Baltic Panamax Index increased for the first time in two months, up 95 points to 859. The index found support from South American grain imports and spill over strength in larger vessels carrying iron ore and coal. Maritime Research’s Grain Freight Index increased from 479.2 to 480.7.
- The US Dollar Index fell 1 percent this week from 81.66 to 80.66.
Bolls are sprouting in soggy central and southeastern Texas, where it has rained 9 straight days and even more in some areas. There are numerous insurance issues related to loss