US Plains hard red winter wheat basis bids were steady to weaker on Tuesday amid increased country wheat sales in the aftermath of a sharp spike in futures prices.
The basis fell as much as 7 cents a bushel in the wake of a 30-cent rally Monday in HRW wheat futures at the Kansas City Board of Trade. December wheat settled at $5.31-3/4. The market was expected to see gains of another 10-20 cents a bushel on concerns about Australian crop prospects and overall tight world supplies.
There was talk early Tuesday that Australia's wheat crop may be as low as 6 million to 8 million tonnes. A leading forecaster told Reuters that Australia's crop was likely to fall below 12 million tonnes. Last year, Australia produced 25 million tonnes.
Also, French arable crops office ONIGC on Tuesday cut its estimate for this year's wheat crop to 33.58 million tonnes, down from its September estimate of 34.03 million and below last year's crop of 34.9 million. Exports were quiet overnight, with Japan expected to buy 60,000 tonnes of wheat on Thursday.
Meanwhile, rain was falling in the Plains on Tuesday morning, though amounts in dry areas of Oklahoma were minimal. Western areas of the Plains received rain showers on Monday, which should help more of the newly seeded crop emerge. But more rain was needed throughout the HRW wheat belt to ease producer concerns.
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