Weekly grain report

Byron Behne watches the grain markets for the Odessa Union Warehouse.

4/3/13: Big rally in Chicago wheat futures today, which has so far continued into the evening session, as it was rumored that China was in buying a bunch of U.S. SRW. Unfortunately, for the first time in several months, soft white prices have broken their link to Chicago futures and have refused to budge, up only five cents from yesterday, while Chicago has gained over 30 cents. Most exporters in Portland have gone back to flat-price soft white bids instead of the basis bids they’d been using for the last few months. White wheat has seen pretty lax export demand as of late, and exporters may be choosing to go to the flat pricing in preparation for the futures market hours to change once again starting next week. Starting on Monday, Chicago wheat futures will trade from 6:30 a.m. PDT until 11:15 a.m., then won’t start up again until 5 p.m. and will run until 5:45 a.m., before breaking again until 6:30 a.m. This means that we once again won’t have futures trading during our afternoon markets and likely won’t be doing any hard wheat pricing during those hours. I expect Portland to still furnish flat-price soft white bids in the afternoon as they did before futures expanded their hours last year.

4/5/13: Once again Chicago wheat futures rallied and white wheat stayed put. There still has been no confirmation of Chinese wheat buying, which is a bit concerning. It’s being reported that freeze damage in parts of Oklahoma was worse than expected, however the effects won’t be quantifiable for some time yet.

4/8/13: Wheat futures rallied again on Monday, led by Kansas City on increasing evidence of freeze damage from a week ago, as well as an additional threat for the middle of this week for the Plains HRW crop. Once again soft white’s response to the rally was muted, except for new crop which is now only 50 cents below old-crop prices. Chinese sources were cited in media releases as confirming China’s purchase of one million metric tons of U.S. SRW, however it’s all new crop spread out between July and December. Weirdly it has yet to be reported by the USDA, which requires reporting of sales above 100,000 metric tons. Winter wheat crop conditions showed the HRW states declining, and SRW states improving. This week's freeze could extend that trend if realized.