Export sales were as expected in total, except for 30 kmt HRW to Morocco & 33 kmt NS/DNS to China were not expected, but were offset by 81.2 kmt cancelled by Korea. Iraq purchased a cargo of HRW, plus a cargo of Australian & Canadian wheat on their last tender. Why they paid the huge premium for HRW is anyone’s guess & must be politically motivated. Otherwise the cash markets are quiet yet the basis continues firm as shippers realize they should sell nothing today, but rather carry wheat forward into new crop. This is the case for the winter wheat, while spring wheat shippers say they cannot buy wheat from growers, who still own 45%-50% of their crop. One trader said it best today, “you cannot buy it with a gun, but you cannot sell it either”. Domestic traders are saying car loadings are going to drop, the mill pipeline will get drawn down, & basis will be forced higher over the next few weeks. Then we have the basis roll from trading over the March contract to the May contract, which almost always results in basis appreciation when we’re in a carrying charge market.
Rail freight premiums over tariff for Feb/Mar are now driving cash basis higher & adding to the cash carry for shippers, with return freight trading at $2000/car (54 ct/bu) today. HRW 12% protein rumored to have traded 25+ ct/bu above the recent bid, with no offers for Feb/Mar 11% protein, while the Kansas City domestic basis closed down 15 ct/bu on HRW 12% Protein after yesterday’s big volume of cars were offered. Domestic spring wheat closed up 10 ct/bu for 1 train of 14% protein. The PNW saw 1 exporter sell both cargoes to Japan last night & cash values have a weaker tone today for the nearby positions.