Cash HRW market was firmer this week & especially the past 2 days with an exporter taking out the offer for old & new crop. The HRW domestic market closed up 5 ct/bu today. Domestic spring wheat closed unchanged but everyone says it is weak with mills plugged & PNW exporters not there for anything in nearby positions. PNW market struggles to find bids for nearby positions as the market is losing faith in any China purchases anytime soon. SRW market is silent but we suggest traders need to keep an eye on Ontario winter wheat conditions for next year b/s. As mentioned yesterday imports next year could go from 5.0 mmt to 30+ mmt, depending upon the quality of the crop harvested.
Reports of China buying Australian wheat (up to 11-12 cargos) & Canadian CWRS (8-10 cargoes) has traders asking why buy the most expensive wheat in the world & ignore PNW SWW & NS/DNS. There is one scenario that China will buy the entire TRQ (9.4 mmt) per year & they are buying everything in the world before they buy US wheat. I don’t know anyone who is willing to believe & trade this, but why are they buying Australian wheat?
USDA reported wheat net sales of 696,000 metric tons for 2019/20 were up 7% from the previous week and 58% from the prior 4-week average. Total commitments as a percent of final marketing year exports is 76% compared to the 5-year average of 77%. Increases were primarily for Bangladesh (111,900 MT, including 56,900 MT switched from unknown destinations), Japan (96,200 MT), Guatemala (88,600 MT), Taiwan (76,800 MT), and South Korea (71,200 MT), were offset by reductions for unknown destinations (16,200 MT).
