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| Don't have time right now to write the full response to this, but here is a big reason for the wide basis-
Terminal elevators (the 4 delivery points of the KC wheat futures contract) are still full of last year's wheat as tehy collect the large carries in the market and have no where to go with the wheat. Using last wek's data, KC stocks were 11.2 mil bu vs 11.2 the prior week and 5.8 mil bu at this time last year. Hutch stocks were off 300,000 bushels (300k bu shipped out) to 15.0 mil bu vs 6.3 mil bu last year. Wichita was off 600,000 bu to 14.9 mil bu, but still double last year at 7.7 mil bu. Salina stocks were off 500,000 at 14.9 mil bu vs 7.7 last year. Deliverable wheat stocks for Chicago wheat are 60.3 mil bu, off from 60.9 last week and up from 40.0 mil bu last year.
That is warehouse receipted grain. There is no arguing those numbers. We're not going to run out, and basis may get even worse than it is now for ordinary protein wheat. Your best hope is high pro wheat or plenty of on-farm storage to capture the tremendous amount of carry in the wheat market. | |
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Historic high basis price on wheat.
