9/20/17 Chicago wheat futures continue their corrective bounce and white wheat basis remains firm as farmer selling has been limited for the past week. Western Australia is forecast to get some rain in the next week while the eastern areas remain dry. It seems like futures could continue to rise with technical resistance about 13 cents above today's close but there's also little in the way of news to suggest a longer term rally at this point.
The Weekly Top Five
These are the 5 biggest issues that NWGG feel are affecting today's markets and items to watch for as we progress through the year.
1. 9/15/17 The USDA revised Australian wheat production lower for not just this year but the prior two years as well on the September supply and demand report. This dropped their projected ending stocks from 5.59 million metric tons to 3.7 million tons which is much tighter than had been assumed following their record crop last year. Now this year's production is much more important as they don't have a buffer to offset a smaller crop. Current prodution is estimated at 22.5 mmt but if it doesn't rain much over the next month and a half and their production drops below 20 mmt then U.S. white wheat could be in a much better position on the global market. 2. 9/15/17 Offseting the Australian production situation somewhat is Russian production increasing. Russia is projected to produce 81 mmt of wheat this year which is a record. They have also announced that they may begin subsidizing transportation in order to try to move a larger amount of grain for export this year although it is not certain that they will actually do that yet. This should keep global wheat prices in check this year unless the Russians aren't able to perform from a logistical stanpoint. 3. 9/15/17 The USDA increased their projected corn yield slightly from last month which again surprised the market as traders were looking for a small production decrease again given crop conditions that are not as good as they've been for the past 3 years. 4. 9/15/17 Canadian spring wheat yields have been coming in larger than expected which has helped pressure DNS prices. Supplies of DNS may still get tight this year but as harvest finishes up the amount of wheat that is moving to market is more than what is needed at this time. 5. 9/15/17 The next big USDA report is the quarterly stocks report on September 29th. Final small grain production will also be presented showing wheat production for the year.