A month ago, I wrote about the potential for stronger premiums for spring wheat in the united states (see here).
The spring wheat crop is heavily centred around North Dakota, at 49% of production over the past decade. In recent months rainfall has been deficient in this region, putting the spring wheat crop at risk of poor performance.
As we mentioned in early May, there was the potential for the spring wheat contract to continue to grow at a premium to Chicago/Kansas. This has eventuated. Minneapolis has moved from a discount in the early part of the year to a premium.
If you are a speculator in markets, it may be an opportunity to trade the spread between the two contracts.
As a producer, this is a sign of a reduction in high protein wheat supply. This has the potential to somewhat assist in protein premiums versus base grades.