Spring Wheat Prices Stuck In Trading Range – After several weeks in the $8 trading range, firm prices are starting to see some upside as the recovery nears completion.
“We are starting to see some price action to the upside. Cash dollars today were $9.25 and even $9.50 a pair,” said Erika Olson, director of marketing and research for the North Dakota Wheat Board. “We’ve stayed in the $8 trading range for quite some time.”
Spring Wheat Prices Stuck In Trading Range
One thing that plays into that, according to Olson, is that some recent production estimates have been lower than expected.
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“We expected a fairly large increase in production after last year’s drought, but some recent reports indicate that it may not be as high as expected,” he said.
The USDA released its Small Grains Summary in late September, a report that provides updates on U.S. acreage, yields and yields, and the forecast for most of the growing season predicts a 20 percent increase in U.S. durum acreage. But when the report was released, the final acreage count was largely on par with last year’s crop of 1.6 million acres.
In North Dakota, the USDA adjusted acreage from one million acres to 790,000 acres. The agency also reduced the number of cultivated acres in Montana from 840,000 to 710,000.
“It’s a pretty big decline in farmland, especially in North Dakota,” he said. “When we asked producers and elevators about late planting, they thought the first acreage estimate was too high; there was a plant that prevented drought, and then at planting time the premium did not compete.”
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USDA also lowered yield estimates slightly, from 29 barrels per acre to 28 bushels per acre for Montana, and from 41 bushels per acre to 40 bushels per acre for North Dakota.
“It’s not a lot of money, but it surprised the market a little bit. We’re still 68 percent higher than last year,” Olson said.
Olson also noted that there are some signs that Canadian cod production may be slightly lower than expected. In the latest Saskatchewan crop report, they are expected to yield 30 bushels per acre. Currently, Canadian statistics show that the country’s annual harvest is 39 million. This means that their yield will be slightly lower, and production there may be lower.
Another thing is that now that the harvest is over, sales will slow down a bit as producers consider storing some of their crops.
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“One thing to keep in mind is that even with higher global production levels, inventories will continue to decline, so we still face relatively tight global supply,” he added.
Harvest is over in the North American growing region. In North Dakota, about 10 percent of the crop has been harvested since the first week of October in many northern counties. Montana’s harvest is “pretty much done.”
For the most part, the quality of the U.S. durum crop is quite good, with test weights averaging over 61 pounds per pound, with very low losses and declining numbers, Olson said.
“But we’re seeing smaller kernels in this year’s crop. And the protein has been 13.9 percent on average so far,” he said. “This is significantly lower than the 15.5 percent increase in the previous year’s crop due to drought. “There are some areas where the protein is as low as 11-12 percent.”
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On the demand side, domestically, the US has seen some buying activity over the past few weeks, but that has slowed down some. The latest “Factory and Baking Report” indicated that knockdown producers will close most of the demand for seeds by December, and they will gradually expand through 2023.
In terms of exports, the US is now over 6MB. This compares to 4.5 MB a year ago. Most of it came to Italy.
“We haven’t seen the need for North Africa yet, and overall, we expect to see a greater need for Morocco and Algeria, so we’ll see if the US can guarantee their security,” he said.
“Export growth is great, but looking at the average numbers, our sales volume is still average.”
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A similar trend is observed in Canadian hard sales volumes. Their sales so far have trailed even a year ago. Likewise, their sales are higher than in Italy, but also lower in the North African region.
“However, recently we have seen offers from Algeria’s Durham and Tunisia, but we don’t know where those purchases will come from,” he said. These two cases are clients.
The main focus of the market in the near term is the harvest and how the demand situation will develop over the next few months.
The USDA released four key reports on January 12 that show the direction of the corn market.
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The USDA released its supply and demand report on January 12, but the report had little impact on the spring wheat market.
Canola prices rose on the first trading day of the new year amid growing concerns about dry weather in Argentina.
US soybean demand remains strong through the end of 2022, supporting prices as the new year has just begun.
The Durum market has been somewhat price-constrained in the first few days of 2023, but expectations are that it will break out this…
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The spring wheat market closed the 2022 market with a slight increase in prices until the end of December.
Canola prices remained in a relatively tight trading range from early to mid-December, led by soybean oil and European mustard.
As 2022 comes to an end and 2023 just begins, corn prices are starting to rise.
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With the holiday season and the end of the year just around the corner, this time of year can mean a quiet time for Durham Market.
Jack Scoville, January 19, 2023 – 9:04 am · Market Commentary, Morning Cereal and Software Reports
General comment. Cotton was moderately higher yesterday and remains within the trading range established over the past few months. The USDA report was considered bearish as the USDA increased its domestic production forecast and downplayed the need to increase ending stocks for both the US and the world. Opinions about weak demand continued, and the weekly export sales report was again poor. Futures have remained in the same trading range since early November, but show weak demand fundamentals. Overall, demand for US cotton is not strong. As China begins to open up its economy in the coming months, some speculation that demand could grow faster has been undermined by news of the spread of Covid-19 in China. Covid is now widespread in China, so the beneficial economic effects of the opening have been delayed, but the effects should be felt in the coming weeks as people there get vaccinated.
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Nightly news. Delta will have mostly dry conditions and above normal temperatures. Short-term rain and normal temperature will be observed in southeastern regions. Texas will have mostly dry conditions and below normal temperatures. The USDA average price is now 83.42 ct/lb. ICE said certified shares were up 8,900 from yesterday’s close of 8,900.
Chart trends. cotton trends are mixed. Support is at 81.570, 80.50 and 79.80 in March and resistance is at 86.30, 88.00 and 89.00 in March.
General comment. FCOJ was lower again last week despite last week’s overnight rally based on the USDA’s Florida production forecast. DJ News highlighted the difficult production environment in Florida this year and asked Moore in general in an article published yesterday. After the market rallied after the release of the report, the market appears to have fallen back into trading range. The holidays should start improving now that the holidays are over. The USDA estimates Florida orange production at just 18 million boxes, down from 20 million previously. US production was 2.7 million tons, which is 22% less than the previous month. The supply situation in the US and global markets appears to be very tight. Production expectations are low in part due to historic storms
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