Doug Werling from Bower Trading told host Chip Flory on Monday’s AgriTalk After the Bell that tightening global supplies of wheat doesn’t necessarily mean more export demand for U.S. wheat, but market attitudes are changing.
After a rough start to the week for grain trade, Werling said, “Wheat acted like it wanted to trade higher, but the weight from corn and soybeans was too much to handle.”
He explained that with wheat harvest started in the Southern Plains, it may be difficult to rally wheat futures, but HRW wheat basis is improving.
Werling said HRW wheat yields are variable – “Which should be expected in a year like this” – but quality is generally very good, which is supporting HRW basis.
“Millers are lined up for this year’s HRW crop,” said Werling. “They need it for blending with some of the lower-protein wheats they have in storage.”
Werling added that tightening global wheat supplies are encouraging, but they are not likely to tighten enough in the 2018-19 marketing year to turn attitudes bullish. “That’s especially true for SRW… SRW is a dog.”
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