Brazil’s Wheat Millers Opt for Quality

US wheat exports to Brazil have jumped despite higher sourcing costs. The differential between ocean freight rates for wheat sourced by Brazil from Argentina and the US Gulf is at a multi-year high. Furthermore, high-quality wheat prices at the US Gulf are quoted at a hefty premium over Argentine port prices. While the USDA expects increased Argentine wheat production, Brazil’s millers are concerned about the quality of Argentina’s wheat. If Brazil continues to pay up, we expect European exporters to take note.