Hard red winter wheat futures at Chicago took a beating last night. From the outside the move appears to fly in the face of the data coming out of the crop tour of Kansas. The market is doing its thing though. US millers are looking for alternatives and finding them. Initial thoughts are that the current imports of milling grade wheat out of Europe into the US will continue, at least until the spring wheat crop quality is known. Millers are then expected to start blending soft red winter wheat and high protein spring wheat to get a grade similar to HRWW for domestic US milling. So HRW values will have two caps / floors going forward, one being the cost of imports, arbitrage is where it’s at, and the quality of the US domestic crop come August / September.
Does this ring the bell for HRWW, probably, but expect to see further volatility until US millers can ensure continuity of supply into at least the first quarter of next year.
It does raise an interesting comparison though, if EU wheat can work into the US can Aussie wheat. French wheat of 12% milling grade is worth roughly US$245 FOB Rouen, let’s take a WAG on the frieght, probably something around US$30, so US$275 C&F USA. Aussie H2 was bid at AUD$402 port this week, roughly US$290 FOB, I’ll take a stab on the freight at US$50, so roughly US$340 C&F USA. That’s not a great number, yes Australian wheat is white wheat and should extract a $25 premium, but even so it’s of no comparison to the French wheat of similar protein into the US market.
It does tell us that US wheat will not be such a huge competitor into the Asian markets throughout the last half of this year and Q1 2024. Australian wheat into the Asian market is still by far the best buy.

The first boat to head into the Black Sea after the extension was granted is on its way to Ukraine to load. That didn’t take long.