Wheat markets have not taken kindly to the recent USDA World Agricultural Supply and Demand Estimates (WASDE) report, which points to chances of record global stocks in 2017/18 of 264.7 million metric tons of all-wheat, or 35.9% of estimated use. Despite growing global demand, 2017/18 stocks as a percentage of estimated use would be the fifth largest in data going back to 1960.
Given the recent pressure seen in wheat markets, which has seen both soft red winter and hard red winter reaching Monday lows dangerously close to a test of contract lows and spring wheat also reaching more than seven-week lows, cash bids for durum have also eased for the first time since early April. As seen on the attached chart, prices sourced by DTN for railcars delivered Chicago-Beyond have dipped $.35 to $9.65 for old crop and by $.45 to $9.75/bushel for new crop.
Meanwhile, crop conditions continue to plunge with the durum crop situated in the driest of growing areas on the continent. This week's crop condition index for North Dakota durum fell by 35 points to 5 points, which compares to the state's five-year average of 180.6. Montana's crop condition index fell from minus 79 to minus 125, which compares to the state's five-year average of 115.
The last crop condition reported in Saskatchewan resulted in a crop condition index of 59, as compared to the five-year average of 183.8, as of July 24. Alberta's latest condition released by the provincial government shows 36.5% Good to Excellent with an expected average yield of 35.9 bushels per acre, down from the five-year average of 47.2 bpa in the province.
While the proof remains in the field results, it is possible that this week's dip in price is but a pause prior to another leg higher.
DTN 360 Poll
This week's poll asks if you think that spring wheat futures will test the highs reached in early July. You can weigh in with your thoughts on this week's poll, which is found, at the lower right side of your DTN Canada Home Page.
Cliff Jamieson can be reached at email@example.com
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