There’s a lot more red on the screen this morning. The punters were less enthusiastic to keep the momentum up after testing the limit of US HRWW futures in the previous session. The realisation that the rally had in fact pulled other producers like Australia and Argentina, who are yet to even start harvest, back to being competitive against US wheat on price may have dulled the desire to buy.
HRWW out of the US Pacific Northwest is a smidge lower, less than a dollar. On a C&F Asian consumer comparison to new crop H2 out of Australia this still has US HRWW at roughly US$1.50/t higher than Aussie H2. That’s not much. Australia was able to make good sales being US$10 to US$20 more expensive than US wheat over the last 12 months. Club white wheat out of the US PNW was roughly US$267 FOB. This compares to Aussie APW1 at roughly US$271 FOB. Aussie freight to Asia is cheaper than US freight, especially into the SE customers.

The view on the Russian closure of the Kerch Straight is still a big talking point. The chance of sending boats to load at alternative Black Sea ports, bypassing the Azov Sea, is said to be minimal. With next 5 months the main export window for Russian wheat, most ports are now booked out. Increases to the through put of these ports, to cater for the lack of access to Azov Sea ports, is not expected to be an option according to Russian analytical company SovEcon.
With potentially 250kt of wheat per week projected to pass through the Kerch Straight, we can start to see the numbers for carry over stocks possibly increase if alternative ports are not found the longer the closure lasts. We also have the Ukrainian side, Odessa and Chornomorsk ports remain closed at present.
Romanian wheat values FOB Constanta port jumped in response to the Odessa closure. On Wednesday Romanian feed wheat was offered at US$228/t, a week later that offer now stands at US$247.
Shipping companies are said to be rejecting orders to load at Ukrainian ports according to some market participants.