Miller Magazine Issue: 152 August 2022

MARKET ANALYSIS 100 MILLER / AUGUST 2022 year's level in the week ending July 24 in the USDA's lat- est update released late Monday night. The winter wheat harvest was 77% complete compared to 70% last week, below the 82% achieved in the same week in 2021 and 3 percentage points below the 5-year average of 80%. The completion rate for the winter wheat harvest is lower than expected by analysts, who had forecast 79%. The USDA export sales report indicated that the previous week's sales increased significantly, but still stood at 511,100 tons. Year-to-date sales commitments are 7,647MMT, cov- ering many international buyers. The average pace of US wheat exports since the beginning of the season was low, despite the fall in futures. Buyers are also looking to capi- talize on the declining trend in wheat prices, but the price of US wheat is still $40/ton above world prices. Many farm- ers, on the contrary, have a lot of storage on the farm and do not want to sell in the near future. Hot weather before harvesting other crops and planting winter wheat creates a "wait and see" policy for many farmers. In Canada's latest agriculture report, the 2022/23 wheat production forecast is raised by 0.6 MMT to 33.7 MMT (21.7 MMT in the previous year). The forecast for rapeseed produc- tion was increased by 0.4 MMT to 18.4 MMT (12.6 MMT in the previous year) and the forecast for barley production was re- duced by 0.2 MMT to 9.1 MMT (6.9 MMT in the previous year) . Rain in the main agricultural regions of North America last week added to the bearish pressure. For the period July 12- 18, 2022, Sask Ag rated spring wheat at 74% Gd/Exc., 22% fair and 4% poor. Alberta Ag rated spring wheat at 83% Gd/ Exc. Sask Ag rated durum wheat at 58% Gd/Exc., 32% fair and 10% poor to very poor. Alberta Ag rated durum wheat at 64% Gd/Exc. Meanwhile, Canada's weekly wheat exports were low in week 49 at just 133,000 tons, with a year-to- date total of 10.5 MMT compared to 18.8 MMT a year earlier. The Grain Exchange of Buenos Aires Argentina reported that for 22/23 wheat planting was completed by 97% on an area of 6.1 million hectares. This means a 100,000-hectare reduction in wheat planting area in Argentina, and is now 0.5 million less than forecast at the end of May. US corn planting health is 61% good to excellent, up from 64% last week and 64% last year. Analysts had expected corn crops to be at 61%. However, StoneX yield forecast models show that the potential for US corn does not ex- ceed 174 b/a (our forecast is 172-174, USDA 177). This could lead to lower than expected production levels.