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Strong Week of HRW Sales Lead Active Round of Buying

Everybody loves a sale, especially buyers of wheat who were forced to pay record prices for dwindling world supplies over the past year. Now, with new crop grain hitting the pipeline from the northern hemisphere, end users are swooping down on the market to restock their empty shelves.

Hard red winter wheat business was especially active in the latest week, according to data released Thursday by USDA. Net new sales for that class of wheat totaled 18.4 million bushels, with a big deal from Iran helping swell the total. Total wheat sales were 25.1 million bushels, down a little from last week but still well above trade guesses and the weekly sales rate forecast by the government. Shipments were in line with the USDA forecast, though they remain behind the pace seen during the average marketing year, likely due to the later harvest in many areas.

Corn and soybean sales also beat expectations, though corn shipments continue to lag the USDA forecast. That suggests the agency may trim its number when demand estimates are updated next week.

Soybean sales remain very strong for this late in the marketing year, at 13.8 million bushels. Some of that business may be rolled into new crop, but end users may also be trying to secure late season shipments for fear new crop delays will be slow hitting the market. Not only will the early harvest in the South be hurt by drought, but late planting may push back harvest in the main Midwestern growing region.

Source: USDA, Reuters