Bullish Demand This Season for US Milling Quality Wheat

A marketing expert says there’s potential for bullish demand for U.S. milling quality wheat this season because of issues around the globe.

With about 30 percent of the nation’s spring wheat harvested and the nation’s winter wheat harvest virtually complete in most states, Jim Sullivan, Executive Vice President of the Leese Group says there are questions about quality that need to be answered, but he expects it to be better than previously thought. He says that will be important worldwide.

“The world definitely needs milling quality wheat. We’ve had issues in the Baltics, Germany and Poland. We’ve certainly had issues in France,” he said. “We know in the past, those rare times when the world has had to come to the world’s warehouse person in the United States and Canada, that prices can get really wild very quickly. So, if there is a story to be told and demand story to be told, it’s potentially in the United States. And I think that’s why milling quality wheat hard, red winter wheat could be the story of the future.”

It’s not just quality issues at play, but political issues as well.

“We talked about the complacency of the Black Sea War. We talked about production problems in Russia. I think there’s more headlines out today from Russia about their production problems and we talked about how some shippers want to avoid the very successful Ukrainian ports and stick with the river ports of Romania for their wheat acquisition in that part of the world. And then you have the Red Sea War. So, you’ve got a lot of issues around the world,” he said. “And then you also have India. I believe India domestic food prices punched through nine dollars. Once again, India could be a net importer of wheat for the first time in a while to be determined. So, you’ve got export demand bottoming out and I think with any kind of bottom in corn and beans, wheat is set to recover.”

Reuters reports Indian wheat prices rose to their highest level in nearly nine months on Wednesday and could surge further during the festival season unless the government starts releasing stocks from its warehouses.