Content ID


Exports and Demand Support Wheat Market

High protein wheat values rise.

Wheat markets had plenty to chew on this week, starting with a surge in hi-pro values, then an impressive export sales number, followed up by a supportive supply/demand report.

Minneapolis led the way higher this week with a couple days of strongly higher prices, dragging the winter wheat markets with it. Cash markets are leading the way higher with increasing basis here in the US and stronger cash bids for higher quality milling wheat around the world.

Kansas City’s hard red winter then got its own bump higher with a strong export sales number of 509 TMT, largely due to the big sale to Iraq last week of 450 TMT. USDA is expecting additional hard red winter business as they increased those export projections in the supply/demand report by 25 million bushels. All the other classes were left unchanged, with the net result a drop in ending stocks of 25 million to 935 million.

World production was increased almost 1 MMT on small adjustments to several countries. Russia’s production was increased 1.0 MMT to 83.0 MMT and their exports bumped .5 MMT to 33.0 MMT. After the report was released, Russia updated their production estimate to 83.9 MMT.

Australia’s disaster crop was left unchanged at 21.5 MMT, but their exports were lowered .5 MMT to 17.5 MMT. Most of the trade is estimating Australia’s production at around 20.0 MMT.

Egypt was back in the market after a three-week absence. They bought 120 TMT from Russia at around $210/MT delivered, down $4/MT from their last purchase. The lower prices set the tone for lower world prices, and futures responded with a drop as well.

Technically, price action is showing support at these important lows first established in late August. While the lows have been penetrated a couple of times, prices have quickly rebounded back above the supports. The chart formation has the look of establishing a solid base of support that will likely become a longer-term trading range low.

That said, the inability of the market to maintain hardly any upward momentum speaks the larger problem for the bull. Plenty of world supplies are keeping bullish enthusiasm muted.

Fundamentals look better into the winter with Australia expected to be mostly absent from the export market and Russia’s usual slowing of exports. That opens a window of opportunity for US exports that I expect to show up in the Dec/Jan/early Feb time frame. There is a strong seasonal tendency for wheat markets to peak in early Feb, so I would look for that time slot to get aggressive with sales.

THIS IS A SOLICITATION. Reproduction or rebroadcast of any portion of this information is strictly prohibited without written permission. The information reflected herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. In an effort to combat misleading information, Opinions expressed are subject to change without notice. This company and its officers, directors, employees and affiliates may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.


Read more about

Tip of the Day

Lower steps to grain drill platform

Smaller steps to grain drill platform After I became unable to step up on the back platform of my grain drill, I built a short ladder and attached it to the platform. At 31... read more

Talk in Marketing

Most Recent Poll

Will you have enough on-farm storage for harvest?

I just want to see the responses
46% (26 votes)
39% (22 votes)
No, it’s going to be a bin-buster
7% (4 votes)
Maybe, depending on yields
5% (3 votes)
No, I am looking at new bins or temporary storage
4% (2 votes)
Total votes: 57
Thank you for voting.