February 23, 2018

We’re looking for something to talk about since the cash markets are so quiet. Bid/offers are 10-20 ct/bu apart & no one seems to care. Rail freight & logistics have been the drivers for Feb/March & are starting to see premiums roll into April, with one mill telling me he agreed to roll a train from LH March to April 1-10 & captured 17 ct/bu. The market held their bids to the March contracts today as everyone expected the basis will appreciate once the roll from March to May is made next week. Traders were pricing everything they had basis the March today & otherwise they were focused on logistics, since there is no new business. Emily was working on 4th quarter export forecast & making final adjustments to the 3rd quarter & the result was additional 500 kmt cut in US exports, & I think there is more to come. I was speaking with friends in Canada & they’ve been seeing more demand from countries such as Kenya, Rwanda, Oman, UAE, Columbia, Ecuador, Peru, Nigeria, Mexico which are taking the lower protein CWRS at the expense of HRW, plus the SE Asian buyers. They are suggesting Canadian’s will drop their margins to zero to keep their elevators at capacity & compete against HRW.

Cash wheat saw no trades reported today, but those looking for nearby trains of HRW & nearby barges of SRW apparently worked those needs out internally since the early push to buy was gone at mid-day. HRW in the export & domestic markets closed unchanged but it will be interesting to see what happens as the cash market rolls to the March next week. Everyone expects the basis will fill the gap of the H-K spread. The domestic spring wheat market saw a few 13.5% protein cars which traded up 15 ct/bu at +95 MWH8. The PNW was all about logistics for the weekend & cash basis was unchanged, but exporters expect japan next week & followed with an announced tender by Taiwan, both for late AprilMay shipment. There was no business reported this week, with Yemen & Philippines asking but not buying



Cash Values