Afternoon wheat: Chicago and Mpls move into another new contract low
<div class=\"default-font-wrapper\" style=\"line-height: 1;font-size: 12pt; font-family: Verdana, Geneva, sans-serif;\"><p id=\"isPasted\" style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><strong><em><u><span style=\'font-family:\"Arial\",sans-serif;color:red;\'>Futures:</span></u></em></strong></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Chicago March wheat started the night slightly lower, and by the early morning hours trade began to weaken further, ultimately moving into new contract lows and ten cents lower. Price action during the day was more level, with futures staying within a nickel range, all of which was near the lows, with trade once again slipping to new lows midday. </span><span style=\'font-family:\"Arial\",sans-serif;\'>March KC wheat saw similar price action to Chicago during the night and again during the day, but there were a few differences. March KC wheat has yet to move into new contract lows. Also, the break into the morning pause and the midday break in KC was not as deep as Chicago (KC only fell to between 7 and 8 lower), so as trade levelled out late in the session, losses in HRW were around three cents less than SRW. </span><span style=\'font-family:\"Arial\",sans-serif;\'>The March KC/Chicago spread slowly firmed through the night, peaking at more than three higher before slipping a couple cents into the morning break and at the start of the day. The buying returned mid-morning with the spread rallying to new intra-day highs, but the spread just could not get above 11 ¼. Trade, however, did stay near their highs the rest of the day and finished with modest gains. </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><strong><em><u><span style=\'font-family:\"Arial\",sans-serif;color:red;\'>Headline news:</span></u></em></strong><span style=\"color:black;\"> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Wheat sales came in at 457,900 mt (16.825 mil bu). The breakdown included HRW sales of 160,500 mt, SRW sales of 43,200 mt, HRS sales of 188,200 mt, White sales of 53,000 mt and Durum sales of 13,200 mt. </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\"font-family:"Arial",sans-serif;\"></span><br></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>The European Commission updated their 2024/25 production estimates. Wheat production estimate for the EU was lowered 400 TMT down to 111.9 MMT. They left their forecast for 24/25 EU wheat exports at 25.0 MMT. The net result trimmed their ending stocks forecast month over month by 400 TMT down to 9.4 MMT.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Coceral released their first outlook for next year's harvest. Soft wheat production in the EU and UK is projected at 140.4 MMT, well above this year's estimated production of 125.5 MMT.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Analysts with Strategie Grains also put out their first production estimates for next year. Soft wheat production for 25/26 in the EU only is projected at 126.6 MMT, which compares with their 24/25 crop production estimate of 114.2 MMT. They project 25/26 marketing year soft wheat exports of 29.3 MMT. They lowered their 24/25 export forecast 1.4 MMT down to 23.8 MMT. Durum wheat production for 25/26 in the EU only is projected at 7.5 MMT, which compares with their 24/25 crop production estimate of 7.4 MMT. </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>The BAGE estimated 24/25 Argentina wheat harvest at 76.1% complete, noting there was a rapid advancement over the past week.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>India’s food secretary commented that India does not need wheat imports for now and that he expects local wheat prices to moderate soon.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>The latest USDA drought monitor shows the areas of drought falling to varying degrees week over week. The Winter wheat area in drought fell to 27% from 29% the week prior and compares to 32% this time last year.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;\'><strong><em><u><span style=\'font-family:\"Arial\",sans-serif;color:red;\'>Export business around this week:</span></u></em></strong><span style=\"color:black;\"> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>South Korean flour millers purchased 86,800 mt of US milling grade wheat. The breakdown included 40,400 mt of Soft White priced between $228.58/mt and $230.16/mt FOB and 21,300 mt of HRW priced between $239.61 and $248.02/mt FOB and 25,100 mt of Northern Spring priced between $270.80/mt and $274.66/mt FOB.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>South Korean flour millers also bought 40,000 mt of Canadian western red spring wheat, reportedly paying in the mid $260’s/mt FOB for the grain.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Japan bought 77,220 mt of Aussie and US origin wheat in their usual weekly tender. The total included 21,800 mt of Aussie white, 20,315 mt of US white, 24,360 mt of US HRW wheat.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Tunisia bought 100 TMT of opt origin soft milling wheat. The breakdown was in four separate tranches, with 25 TMT bought at $255.39/mt C&F, another 25 TMT bought at $256.39/mt C&F, another 25 TMT bought at $256.77/mt C&F, and the final 25 TMT bought at $257.37/mt C&F. </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Tunisia also bought 100 TMT of opt origin durum wheat. The breakdown was in four separate tranches, with 25 TMT bought at $339.49/mt C&F, another 25 TMT bought at $340.29/mt C&F, another 25 TMT bought at $340.49/mt C&F, and the final 25 TMT bought at $340.69/mt C&F. </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>On Wednesday, Algeria’s OAIC bought an undisclosed amount of durum wheat. Estimates of the purchase prices were around $340/mt C&F for larger Panamax shipments and between $350 and $352/mt C&F for smaller Handymax shipments. Part of both purchases was believed to involve Canada western amber durum (CWAD), with some also thought to be sourced from the US and Australia. In their prior durum tender on Nov 21, Algeria made purchases at around $348/mt C&F for Panamax shipments and around $360/mt C&F for smaller shipments.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>On Tuesday, Jordan passed on all offers in their tender for up to 120 TMT of opt origin milling wheat (passed on all offers in their prior three tenders).</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>On Monday, Saudi Arabia’s GFSA bought 804 TMT of opt origin 12.5 pro milling wheat. They had been in for 595 TMT. They usually do not buy any US wheat, but a couple cargoes are thought to be of Russian origin, as well as some from the Black Sea (Romanian and Bulgarian), with some wheat also supplied from South America. Their last major purchase prior to this one was back on Oct 7 when they picked up 307 TMT. </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Bangladesh is in for milling wheat. They have several tender still open. No purchase has been finalized and may take considerable time before purchases can be confirmed.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Dec 19 Japan is in with their usual weekly tender seeking 77,220 mt of Aussie and US origin wheat. The total includes 21,800 mt of Aussie white, 20,315 mt of US white, 24,360 mt of US HRW wheat.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Dec 19 South Korean flour mills are seeking a total of 90 TMT of milling wheat. Of this total, around 50 TMT is expected to be US, with shipment between LH Mar/FH April. Around 40 TMT is expected to be sourced from Canada, with shipment in March.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Dec 19 Tunisia is in for 100 TMT of opt origin milling and 100 TMT of opt origin durum wheat. </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p></div>