US wheat futures responded positively to the USDA weekly crop progress report. The decline in quality for winter wheat was expected but still managed to put the brakes on the decline in SRWW and HRWW from the previous session.
The report held the first condition estimate for both corn and spring wheat. The spring wheat rating took a few by surprise. With just 45% of the spring wheat rated G/E resulting in a larger gain in spring wheat futures than SRWW or HRWW this morning. When it comes to spring wheat in the USA North Dakota is the state to watch. ND produces more than 50% of the countries spring wheat. With the ND crop rated at just 37% G/E it did raise a few eyebrows. Montana produces around 18% of the spring wheat crop, the rating there was also poor at just 36% G/E. Further east into Minnesota, which produces around 13% of the US spring wheat crop, the G/E rating was much better at 82% G/E.
A quick look at the rainfall totals for the US spring wheat belt over the last fortnight tells the story. Much of central and western N.Dakota has seen 100mm to 150mm of rain, S.Dakota is much the same. These falls have also pushed south into Nebraska, but according to the USDA, corn sowing in Nebraska is still ahead of the 5 year average.
The forecast for Northern France and Germany is improving. Much of Northern France has seen less than 30% of average rainfall over the last fortnight. Over the next 7 days this may not be corrected 100%, but 15mm to 50mm will help stop the decline of crops in the short term. Rapeseed values out of Europe were lower on the forecast. Paris rapeseed shedding €5.25/tonne in Feb 26 slot. Although we see Paris milling wheat futures higher by €0.50 / tonne in the Dec slot. Wheat export values out of France, and most other EU and Black Sea exporters, were generally lower.
The weaker AUD will go a long way to countering the reduction in EU & Black Sea wheat values today. The day to day conversion comparison out of the US Pacific Northwest shows small gains for white wheat, SRWW and HRWW, and gains of around AUD$5.00 / tonne for spring wheat.