The drop in futures to new contract lows is starting to price some business. HRW exporters saw Algerian shorts bidding today and we expect something traded since the bid/ask was only 5 ct/bu. Domestic mills have been pricing old and new crop cash business for HRW, but Kansas City spot basis was off today as shippers try to load cars against the receipt rally in basis. SRW mills have started to buy fill in business and bid for January forward shipment but shippers’ offers are not coming down. Plus, the narrowing of the wheat/corn spread saw some SE mills buying feed wheat cars from Ohio (delivery wheat), despite Bunge’s redelivery of receipts. SRW is priced competitively against Russia/EU wheat to Egypt’s GASC, but the SRW won’t make the protein specifications against tonight’s tender for January 21-31. The domestic spring wheat didn’t have many spot cars trading and closed 13.5% protein up 15 ct/bu, but brokers suggest the mill pipeline remains full. PNW exporters have been able to keep the pipeline full and most of them don’t have a bid for December shipments, despite excellent weather for loading of vessels and rail transit. They have been able to hold their basis steady despite the low flat price and reports of no grower sells.

StatsCan reported there is 2.93 million MT of wheat stocks with more than half located at country elevators. Railways have been delayed due to mudslides and a prior derailment in British Columbia. This has restricted the volume of availability of the CN and CP railroad which is credited for the 41% increase in wheat stocks year-on-year in the country.  StatsCan indicated that producers delivered 417 kmt of wheat into the handling system and only 184 kmt of wheat was loaded by rail. Grain handlers delivered 403 kmt into the export market and 412 kmt of wheat was loaded for export. Cumulative wheat exports reached 5.47 million MT compared to 5.02 million MT last year and the 5-year average of 5.1 million. Domestic disappearance through week 18 totaled 1.9 million MT compared to the 5-year average of 1.37 million MT and 1.08 million last year. This could indicate an increase in domestic use year-on-year as the country utilizes this year’s lower protein crop.  We believe tomorrow’s WASDE report will reflect higher domestic consumption and increase exports as USDA adopts the larger StatsCan wheat production estimate.

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