MW is a predominantly North American focused market. Bottom line is the market is supplied. The US is conserving its supply of HRS for domestic use and doing a great job.US exports including future sales on the books are sitting at less then 73% of last marketing year.
Other areas of high protein production are Australia, Russia, Ukraine, Kazakhstan
Canadian sales into the US market are much higher than last year. Movement from Sask for example, is up 40% from last year Aug-December period.
North Dakota prices for 14%px are up 12% from May 17. Canadian prices are steady to lower over the same time period because the CAD was in the basement last May, CN's 2017-18 grain program has come up way short on what is required, there was an increase in total rail traffic beginning in August and the overall protein content of HRS this year is down substantially and could be called a multi year low. In a year when the world wheat market is well supplied having lower protein wheat is very bad. Price is everything.
The World market for Canadian high protein wheat is limited. There is no country in the world that takes a large percentage of their wheat import needs solely from Canada, save one. The US. There is competition in every market from around the world. Canada cannot compete with bumper crops from Russia.
Indonesia, recently named the largest wheat importer in the world imports about 16% of their needs from Canada. While unscientific it would suggest that their mills blend to get the quality they need with that amount.
Positive is that Canadian wheat still commands as high a price as anywhere.
Negative is that old crop wheat needs a shot in the arm. First would be to get some ships loaded. 14 incoming on the west coast this week. To clear 14 this week would be a miracle(sunny today, 2 terminals aren't even loading?). Thus it's likely that the ship count is going up.
Any bump in values for old crop will be spilling over from Kansas wheat problems. The increase would be muted but could amount to 40 or 50 cents. Next up is the prospects for HRS areas. Right now conditions are dry and everyone knows it. We could see a repeat of last summer's price runup very easily and it would happen earlier.
Watch new crop. It is a very different set up than old crop.
Might be as soon as early April out till early May. Doubt too much will happen before then. The Kansas spillover could happen by then but may get partially absorbed by basis if logistics don't get better. I think the risk of lower values for the next eight weeks is small(8-10 cents US)
Agvocate-here's your article(a little dated): https://agfax.com/2018/01/25/wheat-market-global-supplies-of-high-protein-wheat-keep-tightening/ https://agfax.com/2018/01/25/wheat-market-global-supplies-of-high-protein-wheat-keep-tightening/
Other areas of high protein production are Australia, Russia, Ukraine, Kazakhstan
Canadian sales into the US market are much higher than last year. Movement from Sask for example, is up 40% from last year Aug-December period.
North Dakota prices for 14%px are up 12% from May 17. Canadian prices are steady to lower over the same time period because the CAD was in the basement last May, CN's 2017-18 grain program has come up way short on what is required, there was an increase in total rail traffic beginning in August and the overall protein content of HRS this year is down substantially and could be called a multi year low. In a year when the world wheat market is well supplied having lower protein wheat is very bad. Price is everything.
The World market for Canadian high protein wheat is limited. There is no country in the world that takes a large percentage of their wheat import needs solely from Canada, save one. The US. There is competition in every market from around the world. Canada cannot compete with bumper crops from Russia.
Indonesia, recently named the largest wheat importer in the world imports about 16% of their needs from Canada. While unscientific it would suggest that their mills blend to get the quality they need with that amount.
Positive is that Canadian wheat still commands as high a price as anywhere.
Negative is that old crop wheat needs a shot in the arm. First would be to get some ships loaded. 14 incoming on the west coast this week. To clear 14 this week would be a miracle(sunny today, 2 terminals aren't even loading?). Thus it's likely that the ship count is going up.
Any bump in values for old crop will be spilling over from Kansas wheat problems. The increase would be muted but could amount to 40 or 50 cents. Next up is the prospects for HRS areas. Right now conditions are dry and everyone knows it. We could see a repeat of last summer's price runup very easily and it would happen earlier.
Watch new crop. It is a very different set up than old crop.
Might be as soon as early April out till early May. Doubt too much will happen before then. The Kansas spillover could happen by then but may get partially absorbed by basis if logistics don't get better. I think the risk of lower values for the next eight weeks is small(8-10 cents US)
Agvocate-here's your article(a little dated): https://agfax.com/2018/01/25/wheat-market-global-supplies-of-high-protein-wheat-keep-tightening/ https://agfax.com/2018/01/25/wheat-market-global-supplies-of-high-protein-wheat-keep-tightening/
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