There continues to be very little news to move the wheat market, and although harvest is moving along and usually pressures prices, most of that pressure was before harvest and prices have somewhat stabilized since then.
Spring wheat futures prices have still been hovering a bit above the $9 mark, according to Erica Olson, market development and research manager for the North Dakota Wheat Commission, adding that prices did see some support in mid-September on potential news out of Russia regarding exports for Ukraine.
“(Russia and Ukraine) had worked out an export corridor so that Ukraine could export commodities, and last week Russia announced that they intend to potentially revise that deal, so we did see prices spike a little in response to that,” she said.
“One thing to note is that even though Ukraine has been getting agricultural exports out, not a lot of it has been wheat. It’s estimated that, of those shipments, only 20 percent has been wheat and the rest has been other commodities,” she added. “I think we’re going to continue to see a market reaction anytime we see a piece of news come out of that region.”
Closer to home, producers are still in harvest mode for spring wheat in the Northern Plains. According to USDA’s Crop Progress report that came out Sept. 12, about 85 percent of the U.S. spring wheat crop had been harvested. Most of the harvest was complete in South Dakota and Montana while progress in North Dakota was at 80 percent and in Minnesota 75 percent was harvested.
“These warm, dry conditions have really sped up harvest and, given how late some of the crop was planted, I think our harvest progress is actually in pretty good shape,” she said, adding that so far they’ve been hearing mostly good things about this year’s crop. “Yields have been good, although in some areas the yields have been a bit disappointing. But overall, it seems to be a good crop.”
Thus far, there really haven’t been any concerns about any quality issues. Based on samples being analyzed at the NDSU Wheat Quality Lab, protein has been averaging about 14.5 percent, falling numbers are strong, test weights have been strong and there’s been very little damage in the crop so far.
“So at this time there are not a lot of concerns. Although, we are hearing that producer selling has been a little slow this year. We’ll see how the last part of harvest shapes up, especially for the late-planted crop,” she said.
North of the border, Canadian producers have had good harvest weather, as well. In Saskatchewan, about 40 percent of the spring wheat crop was in the bin, and in Manitoba about 30 percent of harvest was complete.
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In USDA’s latest reports, there were no changes to U.S. numbers for spring wheat, but the agency did make some adjustment to the world wheat numbers. USDA increased world wheat production by 3.6 million metric tons (MMT), with most of that – 3 MMT – in Russia, raising estimated production there to 91 MMT. If realized, that would be a record.
“We’re expecting a huge Russian crop and also higher exports from Russia,” she said. “Going forward, there still are concerns just based on various sanctions and also the increase in cost to ship Russian wheat, primarily because the insurance on those ships has gone up substantially. That might be something that could limit some of the exports out of Russia.”
In summarizing the world wheat situation, Olson said, “We’re expecting higher consumption, with consumption outpacing production, and then a slight tightening of ending stocks. Either way, the report was definitely not a market-mover for wheat.”
Similar to the situation for durum, there is no new export sales data available for spring wheat as USDA has not been able to provide weekly export sales reports due to computer problems. However, looking at export inspections, the Sept. 12 report showed 27 million bushels (MB) of wheat inspected for export, about 7 MB higher than the past two weeks.
“That's a positive piece of information. But if we look at total export inspections for the current year, we are below a year ago,” she said.
Going forward, there are other pieces of news to watch. Planting is getting underway in the hard red winter wheat region. As of Sept. 12, about 10 percent of the crop had been planted, which is close to average. Conditions are still dry in that region and there are concerns about what kind of start the crop will get off to.
Also, Stats Canada released its final stocks numbers report. The report showed they ended the 2022 year with wheat stocks down about 40 percent. That number came in below expectations and is the lowest since 1980.
It's still dry throughout portions of Europe, which is causing some concerns about winter planting. Other than that, the next big thing is export sales data, as long as USDA is able to get its new system working to see what type of export activity there has been over the last month since that information has been inaccessible for the last few weeks.
“Wheat exports from the U.S. are projected higher than last year, but we have a couple things working against us – we’re still not quite price competitive, we have a strong dollar, so we’ll see what those numbers show,” she said.
Cash prices are in a range from $8.30 to $8.70.