Wheat futures closed lower this week on continued pressure from record global supplies and poor export demand for U.S. wheat. Futures dropped sharply after USDA revised up its record-high world production forecast on Friday.
CBOT wheat fell to a three and half year low, aided by adequate soil moisture and weakness in the corn market. Some purchasing activity on the world market for high protein wheat helped limit losses by KCBT and MGEX. CBOT March wheat dropped 37 cents to $5.69/bu, KCBT fell 17 cents to $6.29/bu and MGEX lost 5 cents to $6.21/bu. CBOT March corn added 9 cents to close at $4.33/bu on a surprise cut to USDA's stock estimate on Friday. CBOT January soybeans contract added 15 cents to $13.04/bu. HRS basis increased significantly again this week due to freight logistics issues, including overcapacity and weather related complications. In its monthly supply and demand update, USDA increased its forecast for record world production in the 2013/14 marketing year by 1.24 MMT to a 713 MMT.
USDA also increased global carry-in stocks,trade and carry-out stocks and reduced total consumption. USDA increased projected U.S. exports from 29.9 MMT to 30.6 MMT. According to USDA, weekly commercial sales missed market expectations and hit a new marketing year low at 110,800 MT. Total known outstanding sales and accumulated exports of all classes of wheat for the 2013/14 marketing year, through January 2, 2014 were 24.6 MMT, 27 percent greater than last year's year-to-date total of 19.3 MMT. The Baltic Panamax Index fell from 1,750 last week to 1,621. The US Dollar Index decreased from 80.96 last week to 80.75.
