April 3, 2018

Today’s futures rally is not buying us any export business, but Russia wheat was up $3-$4/mt today & Matif was up $3-$4/mt as well, so no real damage. The cash markets were mixed as traders were cutting their HRW production estimates after USDA’s crop condition ratings yesterday PM, the gulf traded up 5+ ct/bu on 11% protein in the old crop. The domestic HRW market was down 10-20 ct/bu but traders didn’t think it would stay down more than a few days, while deferred offers were 15-20 ct/bu above the spot market.  There only a few cars on the domestic spring wheat market which traded down 15 ct/bu on the high side of 14% protein & up 5 ct/bu on 15% protein. The PNW is called unchanged despite not buying any wheat on the futures rally and Japan announcing they’ll tender for 1 cargo this week of WW/HRW.

We played with crop estimates on HRW and acreage estimates on HRS today after talking with various sources in the country. We cut our HRW production about 20 mbu after adjusting for lowering yields in a few OK/KS/TX crop reporting districts; our HRW estimate is 605 mbu. We’ve heard ranges from 585 mbu to 650 mbu, with the high side not willing to throw in the towel yet.   Other spring wheat planting intentions were higher than anyone expected and almost everyone saying it is too early to predict the final. However, we’ll make a best guess today which cuts the March 1 intentions 450 k acres. We’ll assume cutting MN and ND back to 2016 planted area which is an increase of 12% above last year.

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