US wheat futures continue to drift lower, the funds continue to build a sizable net short position with the aid of harvest pressure. Values at Chicago and Minneapolis closed lower, as did cash values out of the Pacific Northwest.
White wheat values out of the PNW were lower by roughly AUD$4.13 once you take day to day moves in the AUD / USD into account. Converting the US price for white club wheat to an equivalent price XF LPP price using north Asia as a consumer, you come up with a value something like AUD$300 ex farm. This bid would not be enough to buy old crop wheat here, as the local S&D in NNSW and SQLD is still very tight, local prices closer to $350 +/- XF LPP.
Doing the same conversion for US white wheat out of the PNW with a delivery window of December shows there isn’t much of a premium for the December slot over the current slot on the export market, roughly +AUD$11.00. This does tend to support current new crop track bids which are roughly $360 NTP Newcastle, or $328 delivered Gunnedah silo, less some local road freight and you come out comparable.
Russian 11.5% wheat values are not leading the race lower into the Asian markets, this race is being won by US values, with Australian values not far behind at present. If we were to calculate what Russian values would be equivalent to XF LPP using the N.Asian market as the consumer, we come up with a number closer to AUD$340 to $350 XF LPP, very close to where the trade here is currently trying to buy old crop at.
Paris and Winnipeg were close to unchanged for rapeseed and canola once you convert nearby values to Aussie dollars per tonne and compare the conversion to yesterdays conversion, roughly a AUD$0.40/t change overnight.
French and Canadian durum values, in AUD per tonne, both slipped further overnight. In part due to the stronger AUD but also due to softer values out of France. Canadian values, both FOB Vancouver and St Lawrence and XF SE Sask were also lower overnight. FOB values have slipped US$10 – US$15 over the last couple of weeks. Interestingly the spread between durum and spring wheat, XF SE Sask, has widened, durum not slipping as much as wheat.