In typical style for US wheat, we run from the business ☹. Today’s 12+ ct/bu rally in futures takes HRW that much further from competitiveness, since Russian & Argentine wheat didn’t move & Baltic was up 4.5 ct/bu equivalent. HRW was equal to Russian wheat C&F to Nigeria before this rally.
President Trump has signed off on the Phase 1 of China Trade Agreement which supposedly suggested China will buy $50 billion of US Agriculture products in 2020. If this were true, we would suggest this will include wheat and HRS should be the beneficiary, plus SWW & HRW. SRW cannot meet their specifications & HRS may be questionable because of zero tolerance on ergot. Traders suggest China will need to remove this restriction & take to .01% which is standard.
USDA reported wheat net sales of 502,700 metric tons for 2019/2020 were up considerably from the previous week’s Thanksgiving Holiday report and up 33% from the prior 4-week average. Increases primarily for Japan (100,000 MT), the Philippines (85,900 MT, including 13,000 MT switched from unknown destinations and decreases of 1,200 MT), Thailand (74,000 MT, including 10,000 MT switched from unknown destinations), unknown destinations (64,100 MT), and Indonesia (57,000 MT), were partially offset by reductions primarily for El Salvador (7,000 MT) and Italy (1,900 MT).
Wheat by Class Export Sales Performance Indicator: Total all-wheat sales are 64% of the total demand forecast compared to 68% last year and the 5-year average of 75%. All-wheat accumulated exports as a percent of total exports is 48% compared to 43% last year and the 5-year average of 51%.
The CPC issued its latest ENSO report indicating conditions favor an ENSO-neutral weather pattern during the winter (70% chance N/D/J) and continuing through spring of 2020 (65% chance M/A/M) for each 3-month period.