US wheat futures and cash prices out of the Pacific Northwest continue to slide lower. I’ve attached a chart converting the PNW values for wheat back to a rough ex farm LPP price using China / Japan as a consumer base. The chart incorporates daily fluctuations in the value of the AUD and PNW wheat values but only considers variations in shipping rates on a less frequent basis.
A quick look at the chart tells us why Aussie cash bids have fallen $30 since mid-March. One thing the chart does outline is the increasing spread between white wheat and 11.5% protein or higher hard wheat up until just recently.
The last week has seen falls of 20mm to 70mm of rain across SW Kansas, Oklahoma and east Texas and the Panhandle. There is more in the forecast for the Panhandle and SE Oklahoma and eastern Texas in the short term too. Temperatures across Kansas are expected to start to increase next week, potentially reaching as high as 27C at Salina by the weekend.
With a smaller than average US HRW crop expected it will be interesting to see if the PNW HRW spread to both white wheat and spring wheat increases in the short to mid-term. The trade will be watching the yield potential and quality of both the US and Canadian spring wheat crops closely, as any shortfall in HRW will most likely be covered by spring wheat.
Conditions across N.Dakota are expected to improve, late snow clearing fields quickly and allowing spring sowing to get underway. By the middle of next week Grand Forks ND should see daytime temperatures into the 20’s and morning above 4C. Further west around Minot ND a similar picture will emerge and spring wheat sowing progress across the US northern plains is expected to increase significantly, hence the sharp fall in MGEX spring wheat futures overnight. China has seen good rain on their winter wheat. The 7 days forecast there looks good, if not a little too wet across the southern wheat regions.