January 17, Cash Wheat Market

The HRW gulf market says they need nearby trains but no one has been willing to pay for the limited offers in the market. The key is quick shipment & no one wants to guarantee they can get the train out before the end of the month. The 12% protein offers have taken values higher for Feb/Mar & Apr/May, perhaps they recognize there will not by any 12% protein available for Apr/May. The 11% protein bid/offer is also higher for Apr/May & Jun/Jul.

The SRW cash markets had more life today. Bids in the CIF market have been creeping higher. March barges traded at +63 WH and would likely trade there again, with the bid/offer +62/65 WH. The strength in the CIF market is thought to be due to wheat getting priced in the last two days, when board prices dropped. There were 50 receipts cancelled in Toledo (Conant) tonight, leaving 239 receipts outstanding, and folks estimate the remaining receipts are worth at least +5 to +20 WH, depending upon when they can be loaded out. Note: the receipts that were cancelled tonight in Conant were old receipts, some six months to a year old.

Mills will eagerly accept early applications of J/F/M purchases, as no wheat has been moving in the country. Folks have reportedly been bidding +30 WH fob the elevator and can’t even get an offer. The strength in the cash markets have been supporting the nearby futures spread since October, but it wasn’t enough to reverse trigger the VSR on the Dec, with funds seemingly defending their position.

There were 18 spring wheat singles and two trains for sale on the spot market today. A train averaging 13.94% protein traded at +120 MWH. The other train averaged 14.4% protein and traded the high side of 14’s up a nickel, at +125 MWH. The 18 singles were all 15% protein, with those on the low side trading up a nickel at +190 MWH and those on the high side trading down a dime at +200 MWH. Most of the interest today from mills was on the 15’s.

The PNW export market is called unchanged but exporters are becoming more concerned about lack of replacement bushels from growers/shippers. They have a small cargo to price for japan tonight & that is the only business I’ve heard, other than SE Asia buyers asking for values. Exporters will keep any push in their bids within their company & pay directly to growers if they must have bushels. Exporters are trying to raise their FOB offers rather than continuing to sell at negative margins to track bids, as most of them have sold their February capacity. They have learned to ignore the much cheaper Canadian offers & focus on those buyers who insist on US origin.

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