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Soft White Wheat Analysis


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Soft White Wheat Analysis

  1. 1. Pacific Northwest Soft White Wheat Historical Spread Analysis<br />Data: <br />USDA Agricultural Marketing Service – Portland, OR<br />Chicago Board of Trade<br />Analysis:<br />Drew Lein, Global Risk Management<br />August 18th, 2010<br />
  2. 2. PNW cash wheat and Chicago futures markets directionally follow one another<br />The difference between the two prices is referred to as the spread or basis.<br />When PNW Price > Chicago Price, basis is at a premium.<br />When PNW Price < Chicago Price, basis is at a discount.<br />
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  4. 4. Why the record high premiums in 2007? <br />Record decline in White Wheat ES.U<br />combined with decline in All Wheat ES/U<br />
  5. 5. PNW Cash prices recently have traded well below <br />historical relationships to Chicago Futures and<br /> are currently at a discount.<br />