Wheat futures ended mixed, with winter wheat lower and spring wheat higher, and MGE’s premium to other markets continues to widen. July Minneapolis settled at $1.32/Bu premium to Chicago, which on a continuous basis is the highest since January. Our work continues to suggest that there’s value in higher protein wheat.
Old crop weekly export sales totaled 7 Mil Bu, with total 16/17 commitments now at 1,043 Mil Bu, nearly 10 Mil above the USDA’s target. New crop sales totaled a decent 13 Mil, and along with outstanding old crop sales, new crop commitments as of mid-May rest at 235 Mil, up 11% from last year. With EU cash prices little changed this week, the US Gulf market remains competitive, and through sales as of mid-May correlate poorly with final exports, we expect a decent pace of weekly demand to continue.
Additionally, the European weather pattern will be rather hot and dry in the next two weeks, and the risk is that this pattern continues throughout the summer months – something that’s still included in longer term climate guidance. In recent days we’ve discussed how world wheat prices are in the process of forming a lasting bottom, and we advise patience with respect to extending cash sales.
