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2009 is the One Other Year

Published on: 14:09PM Jul 22, 2011


United States Department of Agriculture (USDA) estimates current Hard Red Spring Wheat (HRSW) heading of 60 percent which is the second lowest for week 28 of the calendar year dating back to 1981. The lowest HRSW heading percentage was 57 percent in 2009. The third lowest heading occurred in 1995 at 64 percent. HRSW headed an average of 84 percent between 1981 and the current crop year. Past USDA estimates show heading increases of as much as 27 percent in a
single week.
Does the present low heading suggest reduced end stocks to use and have an impact on the HRSW futures price?
USDA releases a weekly publication of Crop Progress and Conditions both present and past, which provides the status of multiple crops, including Hard Red Spring Wheat (HRSW).
USDA’s 2009 World Agriculture Supply and Demand Estimates (WASDE) monthly reports indicated increasing levels of end stocks to use for HRSW from 33 percent in July 2009 to 58 percent the following January. The July to January 1995 WASDE provided a range high of 26 percent in August, a low of 22 percent in December and 23 percent in the January annual. Present HRSW end stocks to use are 32 percent.
In 1995 HRSW futures bottomed in August and then consolidated through February. On the first day of October 2009, HRSW futures found a bottom price and had price consolidation into February. The price consolidation was nearly double in 2009 than 1995, but remember the end stocks to use were larger for 1995.
 MGEX welcomes your questions.........Joe Victor


 Information used to compile this update is from publicly available sources. Nothing contained herein should be construed as a trading recommendation of MGEX, its employee or its members. For informational purposes only.