US Plains hard red winter wheat basis bids were mostly steady to weaker Wednesday as new-crop cutting weighed on the basis at some locations. A merchant in Goodland, Kansas, dropped the basis a dime a bushel for old-crop wheat, and was posting 53 cents under July futures for new-crop.
While in Salina and Hutchinson, Kansas, the basis for new-crop wheat moved to 15 cents under the July futures contract. Values in Kansas City were also adopting a softer tone as the wheat harvest got underway. Protein premiums for railcar wheat to and through Kansas City were 2 cents a bushel lower across the scale, reflecting the advance of harvest activities.
Word was spreading of test cutting in southern Kansas along the Oklahoma border and harvesting was expected to be underway in the top US producing state of Kansas by mid-week of next week.
Warm and mostly dry weather helped accelerate the pace of harvest after recent rain-related delays. Test weights remained a concern in some areas, however, because of the excessive late-season moisture.
Still, the new US winter wheat crop was expected to see good yields. On Tuesday, the Informa Economics crop consulting firm pegged the 2007 US all-winter wheat at 1.686 billion bushels, including an HRW wheat crop of 1.095 million bushels. USDA last month pegged the all-winter wheat production at 1.62 billion bushels and HRW production at 1.03 billion bushels.
Despite the advance of the harvest and the higher production forecasts, Kansas City Board of Trade HRW wheat futures rallied to new contract highs in some deliveries Tuesday. July wheat ended up 5-3/4 cents at $5.10-1/2 per bushel, September ended up 5-1/4 cents at $5.22 and December closed up 8-1/4 cents at $5.38-1/4. New highs were posted in both September and December contracts. The market was called to open up 1 to 2 cents Wednesday in follow-through, traders said.
On the export front, Japan's Agriculture Ministry has offered to buy 100,000 tonnes of wheat from the United States, Canada and Australia at a weekly tender closing Thursday.