Traders are watching the Z-H spread in all 3 wheat markets and the biggest unknown is why WZ-WH traded out to -19.5 when cash basis is so far above DVE for SRW and HRW. Deliveries are unlikely on MGEX with the spread at -17 ct/bu, KCBT expects delivery of 10.5% protein to help insure a VSR trigger on KWH8, and the only reason for deliveries on CME is if a warehousemen thinks they can put out enough receipts to break the spread and immediately buy them back at a profit. Delivery certainly isn’t the CME warehousemen’s best sale and I know of a few folks willing to take delivery of HRW or SRW on WZ7.

The HRW bids are coming back to the market and looking for the offers. The sharp drop in futures has HRW close to being competitive to Algeria on tomorrow’s tender. The gulf market is looking for offers of 12% protein for December shipment and exporters have raised their bids for ordinary protein in search of replacement bushels for Algeria pricing.

SRW cash markets are firm, but without a lot of offers. Toledo bids are seen in the upper 20’s basis the March, but it is unclear where the offer would be. Wednesday night we will see registrations for delivery, with Thursday being First Notice Day for those long futures before going into the delivery period.

The PNW cash market remains firm with lack of grower / shipper sales after the sharp break in futures. Taiwan tenders December 1st for 2 cargos total 81,780 mt. for shipment January & February.

Global headlines:

• Taiwan tenders for 81.78 kmt of US wheat with deadline for offers December 1st.
• Algeria tenders for 50 kmt milling wheat sought for January and February 2018 shipment. Tender deadline is November 28th.
• GASC tenders for January 11-20 wheat shipment with tender deadline November 28th.
• Argentine wheat conditions last week were 45.6% good to excellent, 30% fair, and 24.4% poor to very poor. Wheat soil moisture conditions were 42.5% favorable and 25.8% optimal to wet. Wheat heading is 96% compared to 78.2% the previous week and the 5-year average of 88%.
• Rabobank’s November commodity report pegged Australian wheat production at 20.9 million MT with a 40% fall below average for NSW and Queensland.