Today was slower than yesterday in the cash wheat markets. The rail freight is having the biggest impact on cash basis with shuttles bid $900/car premium to tariff for Feb with no offer & March bid/offer $500/$750 for last half of month. The premium for the nearby freight increases the cash carry to deferred months since shippers should sell out their freight & deferred shipment to late date when freight is cheaper. (See cash & carry).

HRW is firming up at the gulf as result of higher freight rate adding to the cash carry, & Apr/May 11% traded at +120 KWK8 today. The domestic market closed unchanged, after closing up yesterday. The SRW barge market is looking for in-port or afloat barges after very few applications to date on February contracts, as shippers focus on corn & soybean loadings. The domestic market is not well defined but traders say they cannot buy or sell within 10-20 ct/bu. It would make more sense to see deliveries on the WH8 than it did the WZ7, but because of the complaints filed over the WZ7 deliveries the general wisdom is they won’t make that play on the WH8. The domestic spring wheat market saw 1 small train of 15% protein trade today up 25 ct/bu & everyone questions why MGEX was so weak today in comparison to the other markets. The PNW cash markets as unchanged with Japan in this week for the last 2 cargoes for the period March 21-April 20, then they’ll skip next week before coming back for April 21-May 20 shipment. The Columbia River closes March 3 for 3 weeks, but this is a planned maintenance shutdown.

There has been some mention of the TPP agreement which will be signed in March without the participation of the USA. The agreement which involves Australia & Canada would lower import duties from $150/mt to $85/mt over 10 years, while the USA duty remains at $150/mt. US Wheat & others are starting to talk about the possible impact on USA exports.

USDA released its Feed Outlook report projecting 2017/18 feed and residual use for corn, sorghum, barley, oats, and wheat at 148.9 million MT, 2.5 million lower than last month’s 151.4 million on a September-August marketing year. The lower projection was credited to a cut in wheat to 3.4 million MT from 5.8 million MT. The table below shows quarterly feed and residual indicating first quarter wheat F/R at 169 mbu and second quarter at -51.44 million or 117.56 mbu for the FH of the marketing year compared to 235 mbu last year (-50%).