Brazil’s Bolsonaro authorized a new quota to buy extra Mercosur wheat without tariffs. They did this last year and it puts US and other world wheat on even playing field for up to 750.0 kmt. This is more bearish Argentine values than bullish US values, but it gives HRW a chance in M/A/M shipment
positions.
This week we saw domestic HRW and HRS basis work higher, while HRW export basis was very weak for nearby position. PNW values were steady to lower for HRW/DNS and up 15+ ct/bu for SWW. Export sales hit a low for the year this week. The only support for US wheat was China’s interest for SWW and asking about HRW (which they say is too expensive). Exporters have sold most of their capacity for Dec./Jan. and into Feb. at big elevation margins. They are starting to discount those margins for M/A/M, as the China soybean program shifts to Latin America.