Firm US domestic wheat premiums

The cash wheat markets continue to have a firm tone. The HRW domestic market was on fire today, with 11.2% protein cars trading at a record high +150 KWZ and 12.5% protein cars trading +245 KWZ; mills are finding it harder and harder to live off the spot market; offered volume is small and demand is high, which has caused the domestic market to rally 45 to 90 cents in the last month (depending upon protein). Folks are beginning to buy HRW delivery receipts, as it is the cheapest HRW they can find; there were 49 receipts cancelled in Salina tonight. The SRW cash market is called unchanged, with no new trades to report, but indications are firm and well above DVE. North Carolina mills were reportedly in the market today, but it will take +35 to +40 WZ fob Toledo equivalent to get anyone to think about offering wheat today.

Adding further frustration to the lack of offers in both the HRW and SRW domestic markets has been the lingering row crop harvest; warehousemen are unsure where they can find replacement, as producers are preoccupied with harvest, and the country is not eager to move any wheat. Corn producers should see cooler, drier weather to help get nearer to finishing their harvest. As of Monday’s crop progress report, 70% of all corn in the U.S. was harvested. USDA reports that similar years, where less than 75% of corn harvest at this time period, were 1996, 2004, 2008, 2009, and 2014. In all those years winter wheat planting declined by 3.0 million acres or more from the previous year! This could indicate that total winter wheat planting will be down 10% from 2017/18, or total less than 30 million acres, which is arguably extreme, but does support forecasted reductions in planted area by at least four percent.

The spring wheat market saw good interest for 15% protein today, with five cars averaging 15.08 trading at +181 MWZ, closing the low side up 26 ct/bu, and a train with the same average protein trading at +188 MWZ, closing the low side down 12 ct/bu.

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