WINNIPEG — Concerns over poor quality North American wheat crops have seen the Minneapolis spring wheat premium widen over Kansas City winter wheat.
That spread could grow wider heading into the summer, according to a U.S. analyst.
The nearby Minneapolis spring wheat contract settled up 3.75 cents May 18, while the corresponding Kansas City hard red winter wheat contract lost half a cent.
July wheat in Minneapolis settled at US$5.4475 per bushel May 18, which puts it at a premium of $1.18 over the Kansas City July contract.
The spread between the two commodities has widened considerably over the past year with Minneapolis wheat trading at only a 50-cent premium to Kansas City at the same point in 2016.
Bryan Strommen of Progressive Ag in Fargo, North Dakota, described the spread as “historically wide” and expected it would continue to widen, “especially if we see some protein demand come into play.”
He said the recent snow in Kansas, followed by rain, led to concerns over the quality and protein content of the winter wheat.
Millers are short bought and have upped their demand, said Strommen.
Major world wheat buyer Egypt is also looking for better quality wheat, he added, while Canadian seeding issues are also underpinning Minneapolis futures.
“Maybe there are some opportunities for some better (price) levels,” said Strommen.