Key insights
- Cold weather and persistent drought threaten hard red winter wheat crops in the US Southern Plains. While basis bids remained flat, concerns about crop damage could impact wheat futures. Traders are closely monitoring USDA export sales data to assess the impact of the recent rally on export demand. This could lead to some short-term volatility in related agricultural stocks.
CHICAGO, May 6 (Reuters) - Basis bids for hard red winter wheat remained flat in the southern U.S. Plains on Wednesday while merchandisers eyed the risk for cold weather to hurt drought-hit crops.
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Frost and freezes were expected on Thursday morning across the Plains, possibly extending as far south as the northern panhandle of Texas, according to a daily U.S. Department of Agriculture weather report.
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The cold snap could threaten winter wheat in the heading stage of development after crops have struggled with a persistent drought, a trader said.
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K.C. hard red winter wheat futures set multi-year highs last week on worries about crop damage from the drought.
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Benchmark K.C. July wheat futures settled down 3 cents at $6.87 a bushel on Wednesday.
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On Thursday, traders will assess weekly U.S. Department of Agriculture export sales data to see whether the recent rally crippled export demand.
Basis values are quoted against futures in cts/bu:
Current Previous Cash
basis basis price
KANSAS
Wichita -43 + N -43 + N $6.47
Newton -68 + N -68 + N $6.22
Goodland -90 + N -90 + N $6.00
TEXAS
Gulf track* +120 + N +120 + N $8.10
Galveston** +100 + N +100 + N $7.90
OKLAHOMA
Enid -30 + N -30 + N $6.60
Catoosa -15 + N -15 + N $6.75
NOTES:
H = March, K = May, N = July, U = September
Z = December; UNQ = Unquoted bids
0 = Spot Option price; NC = No comparison
- = No. 1 12% hard winter wheat, rail bids
** = Ordinary protein, rail bids
LINKS:
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K.C. HRW wheat protein scales [KCBT/SCA]
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U.S. weekly wheat crop progress [US/WHE]
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U.S. forward basis
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U.S. Midwest cash grain PM [GRA/PM]
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U.S. CIF Gulf Grain [GRA/C]
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U.S. FOB Gulf Grain [GRA/F]