Basis stays steady as cold and drought threaten crops

CHICAGO, May 6 (Reuters) – Basis bids for hard red winter wheat remained flat in the southern U.S. Plains on Wednesday while merchandisers eyed the risk for cold weather to hurt drought-hit crops.

• Frost and freezes were expected on Thursday morning across the Plains, possibly extending as far south as the northern panhandle of Texas, according to a daily U.S. Department of Agriculture weather report.

• The cold snap could threaten winter wheat in the heading stage of development after crops have struggled with a persistent drought, a trader said.

• K.C. hard red winter wheat futures set multi-year highs last week on worries about crop damage from the drought.

• Benchmark K.C. July wheat futures settled down 3 cents at $6.87 a bushel on Wednesday.

• On Thursday, traders will assess weekly U.S. Department of Agriculture export sales data to see whether the recent rally crippled export demand.

Basis values are quoted against futures in cts/bu:  

  Current     Previous     Cash

  basis     basis     price

KANSAS              

Wichita -43 + N -43 + N $6.47

Newton -68 + N -68 + N $6.22

Goodland -90 + N -90 + N $6.00

TEXAS              

Gulf track* +120 + N +120 + N $8.10

Galveston** +100 + N +100 + N $7.90

OKLAHOMA              

Enid -30 + N -30 + N $6.60

Catoosa -15 + N -15 + N $6.75

NOTES:

H = March, K = May, N = July, U = September

Z = December; UNQ = Unquoted bids

0 = Spot Option price; NC = No comparison

* = No. 1 12% hard winter wheat, rail bids

** = Ordinary protein, rail bids

LINKS:      

* K.C. HRW wheat protein scales [KCBT/SCA]

* U.S. weekly wheat crop progress [US/WHE]

* U.S. forward basis

* U.S. Midwest cash grain PM [GRA/PM]

* U.S. CIF Gulf Grain [GRA/C]

* U.S. FOB Gulf Grain [GRA/F]

(Reporting by Tom Polansek; Editing by Will Dunham)