Soft red winter wheat futures at Chicago continued to fall lower defying technical signals indicating the market is already over sold. Closing at a fresh 267 day low of 483.5c/bu, a number not seen lower since late September last year. The lower close takes the weekly fall to just under AUD$10 / tonne.
The weather conditions in the US that are helping soybean, corn and spring wheat futures flatten or firm a smidge is what is hurting the winter wheat contracts. Hot, dry conditions are making for a perfect harvest of winter wheat with progress picking up across Kansas this week.
Hard red wheat futures at Chicago are poor, at just $4.285/bu (AUD$230/t). Quality is mixed with protein varying from as low as 9% up to 14%. Premiums for the higher quality are still good (but back a smidge) at +35c/bu (AUD$18.75) at the port for 13%, signalling that there may be more lower protein coming in than expected. The poorer conditions in the spring wheat region of western North Dakota would also be helping the protein spreads.
The spread from 13% to 16% for spring wheat is currently 80c/bu (AUD$43). As for US white wheat, 10.5% protein, we see export offers out of the PNW at anything between $5.85/bu and $7.80/bu but averaging $6.06/bu barge / train port. To perform the exercise this would equate to something equivalent to about AUD$315 – $310 port, about A$10 – A$15 above current values here. We also see the Platts Aussie wheat contract at Chicago closing at US$237.75 for the Feb 21 slot, this would equate to a port value somewhere around $315…mmmm