RSS
Twitter
Linked In
News In
News
Linked In
RSS
https://twitter.com/Agrimoney
http://www.newsnow.co.uk/h/Industry+Sectors/Agriculture

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Brazil retreat dents US hard winter wheat market

Twitter Linkedin

Hard red winter wheat prices returned to the back foot versus other varieties after data showed cancellations by importers of US supplies, unusually, exceeding fresh business, as Brazil's tariff reinstatement hit home.

The US Department of Agriculture reported net export sales cancellations of 25,000 tonnes of hard red winter wheat last week � a dynamic usually only seen towards the end of the crop year as buyers switch delivery to the following season.

"This is usually the kind of thing we see only in the last few weeks of the season," Brian Henry, at US broker Benson Quinn Commodities, told Agrimoney.com.

Indeed, it is the first negative export sales figure for hard red winter wheat not involving May, the last month of the crop year, since 2009, and the first to occur in August since at least the 1980s.

Brazil cancellation

The weak performance reflected the cancellation by Brazil, a structural importer of hard red winter wheat, of a net 59,000 tonnes in orders, after the country reinstated from last week a 10% tax on imports from outside the Mercosur trade block.

Brazil has been importing unusually large quantities of US wheat over the last 18 months, after a poor domestic production, and weak output in Argentina, Brazil's default origin for imports, forced it to look elsewhere.

And it has left the US - with 3.28m tonnes in hard red winter wheat shipments or unfulfilled orders - looking at its worst start to a season for export demand for the class in five years.

The performance contrasts with 2.21m tonnes for soft red winter wheat, the type traded in Chicago, for which trade has begun 2014-15 with unusual briskness for the variety.

'Not the demand'

"Demand for soft red winter wheat has been better than many people believed and Gulf basis has remained pretty firm," Mr Henry said, referring to the prices in US Gulf of Mexico ports.

"But basis on hard red winter wheat has not performed so well. There is just not the demand for it at the moment."

The premium of hard red winter wheat futures, traded in Kansas City, to Chicago-listed soft red winter wheat touched 74.75 cents a bushel, September basis, on Thursday reversing after three days of recovery slumping from a late-June high of $1.38 � a bushel.

Against Minneapolis spring wheat the Kansas City premium, which reached 32 cents a bushel in June, narrowed to 5 cents a bushel.

By Agrimoney.com

Twitter Linkedin
Related Stories

Evening markets: Wheat futures tumble to contract low, on US export downturn

Weak US export sales data hurt wheat prices, while depressing soybean futures too. But cotton prices buck the trend

Hopes nudge higher for UK rapeseed sowings, and soar for Ukraine

Origin Enterprises and the International Grains Council underline a divide in EU sowings fortunes. East in Ukraine, rains boost rapeseed hopes

Ag commodity prices face further pressure, says SocGen, urging sell bets

The bank sees scope for forward prices of the likes of corn, cotton, hogs and wheat falling well below investor expectations

US soybean export sales fall short, but cotton stars again

Total US cotton export commitments are running 39% ahead of year-ago levels. But shippers may be wise to keep the champagne on ice for now
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

© Agrimoney.com 2017

Agrimoney.com and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069