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U.S. Wheat Associates reports that Gulf and Pacific Northwest hard red spring and hard red winter basis values rose sharply over the past month. Secondary rail rates for October shuttle trains climbed 36% to $1,172 per car, nearly three times the previous three-year average.
Limited export elevator capacity added to the upward pressure.
Higher rail and elevator costs widen the gap between farm-gate and export wheat prices, raising delivered costs for overseas buyers. The strength is tied to strong Chinese demand for U.S. grain, which keeps U.S. wheat export prices firm.
uswheat.orgSep 2, 2020After 22 past bullish logistics events, KWHEAT moved a median -1.2% over 5 sessions (45% higher; middle half -2.5% to +1.7%), and +3.9% over 20.
After 283 past bullish logistics events, WHEAT moved a median -0.2% over 5 sessions (46% higher; middle half -1.4% to +1.3%), and -0.1% over 20.
Not enough comparable past events yet for a historical read.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
