Good US weekly wheat sales helped US wheat futures claw back some of yesterday losses. Although HRW did manage to close in the red yet again. This takes HRW futures very close to slipping under 400c/bu (AUD$210/t).
The lowest number I have for Kansas wheat on my records dates back to December 1999, remember the black tip year when the AWB wanted to pay less than $100 for DR6. Using the same formula and CPI (2.5%) that number US$2.485c/bu today would equate to about US$407c/bu or roughly AUD$229. So I guess the take home message is that current futures values in the USA are comparatively at very, very low levels.
As mentioned earlier US weekly sales did put the brakes on the fall a little. Mexico featured as a major buyer of both old and new crop wheat. Wheat loaded for export out of the US was also high at 800kt, a marketing year high. This takes the total US exports for the marketing year to 20.1mt, it is looking unlikely that US exports will meet the USDA projection with a weekly average of 1.13mt required to meet their estimate of 25.72mt.
Saudi Arabia have put forward a wheat tender for 600kt of 12.5% milling wheat. Since their last purchase in March international values have fallen so most punters are expecting offers to be under the March value of US$248/t CIF. Currently 12.5% milling wheat out of Russia is offered FOB at roughly US$216. Freight to Jeddah is about US$28 / tonne, so I can’t see it being bought significantly cheaper.