Two months into the 2021-2022 and the all wheat supply and demand situation continues to tighten. My analysis of the cmdty National Wheat Price Indexes for HRW, HRS, and SRW is showing a daily average of $6.55 through the end of July. Based on this study back through the 2014-2015 marketing year, the end of July price correlates to an available stocks-to-use of 29.0%, easily the tightest supply and demand situation over that same timeframe.

At the end of the month, the Cost of Carry tables for the three markets were:

  • Kansas City (HRW)
    • Neutral
      • September-December spread at a carry of 11 cents
        • 59% calculated full commercial carry (cfcc): Neutral
      • September-May spread (used as a proxy for the September-to-May forward curve) at a carry of 21 cents
        • 43% cfcc: Neutral
  • Chicago (SRW)
    • Neutral-Bullish
      • September-December spread at a carry of 9.25 cents
        • 49% calculated full commercial carry (cfcc): Neutral
      • September-May spread (used as a proxy for the September-to-May forward curve) at a carry of 16 cents
        • 32% cfcc: Bullish
  • Minneapolis (HRS)
    • Bullish
      • September-December spread at an inverse of 13.75 cents
        • Any inverse is bullish
      • September-July spread (used as a proxy for the September-to-July forward curve) at an inverse of 57.75 cents