Russia Not Planning Any Wheat Export Bans
The Russian Agricultural Minister reiterated that the government is not planning to implement any restrictions on wheat exports this marketing year.
The announcement follows a similar announcement in January where the government stated it’s commitment to maintain the current export pace despite what appeared to be a spike in domestic wheat prices.
Russian estimates that wheat exports would be 37 MMT compared to 41.4 MMT during the 17/18 marketing year and 27.8 MMT during the 16/17 marketing year.
Despite the lack of supply issues, Russian 12.5% FOB spreads are strengthening and making Russian wheat less competitive in the global export markets.
How Does This Impact The U.S. Farmer? Any news regarding Russian wheat exports seems to spook the wheat futures markets. The language that continues to reinforce the notion that either the carry-in from the 17/18 marketing year or the current year’s production are larger than estimated and has the ability to keep U.S. HRW futures prices muted. We continue to monitor Russian FOB and U.S. HRW FOB Houston export prices for signals.
Export Sales Announcement
Private exporters reported to the U.S. Department of Agriculture export sales of 122,376 metric tons of corn for delivery to unknown destinations during the 2018/2019 marketing year.
AgRural Cuts Brazilian Soybean Production to 112.5 MMT
Agricultural consulting firm AgRural reduced the Brazilian soybean crop to the lowest level in three years as adverse weather has hampered yields.
AgRural prediction of 112.5 MMT is down from the firm’s 116.9 MMT forecast in January.
AgRural cut production forecasts for all Brazilian states except three because of the unfavorable climate conditions. The states most hit by drought have so far been Paraná, Mato Grosso do Sul and Mato Grosso, Brazil's top grain producer.
What Does This Mean For U.S. Farmers? Another day and another firm reducing Brazilian production. AgRural’s estimate is the lowest value that the broad market has seen and the most bullish in the current growing season. Any Brazilian production cuts below the 116-117.5 MMT range could have a positive impact on the futures markets. However we continue to monitor the Brazilian export FOB spreads and the shipping lineup for any potential logistical problems.
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