All eyes on wheat spreads

Wow! Kansas City domestic wheat exploded higher today absorbing all of the KWZ-KWH roll plus another 8+ ct/bu. HRW gulf market saw better bids for 12% protein today and consumers are asking if there will be 12% protein available the balance of the year. SRW domestic market was focused on the deliveries and the cif barge market saw better bids as they rolled to the WH8. Domestic spring wheat closed up 20 ct/bu on 14% protein train. The PNW is pricing Japan and Taiwan tonight, while talking seriously about the Saudi tender this weekend; cash basis starting to inch higher.

All eyes have been on the delivery markets after 2,000 contracts delivered on CME, 200 delivered on MGEX and only 55 contracts on KCBT. Tonight, there were 300 new contracts for KCBT, 200 new contracts registered for MGEX and nothing new for CME.  Everyone will be watching to see how many redeliveries we see tomorrow. No one knows who the Merrill Lynch stopper was of 1,185 contracts.  MGEX announced 398 deliveries for tomorrow, of which 75 were redeliveries.

Twitter was wild with comments about the deliveries against WZ, obviously the market was long and surprised since cash was so far above DVE. The excuse for deliveries was a warehouse owned old wheat with low falling numbers and mills would not buy it. I asked if they offered a discount of 20-30 ct/bu to 2017 harvest, but got no answer. Toledo mill was bidding +20 WH8 compared to delivery at -18.25 WH8, but they’re also betting no one can load out the wheat in a timely fashion.

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