MarketsFarm — Growing drought concerns in the U.S. and improved export numbers led to higher bids for western Canadian wheat for the week ended Thursday. However, a mid-week selloff on the futures market held back some gains.
The southern U.S. Plains, which are a growing area for hard red winter wheat, have been affected by dry growing conditions. In addition, global demand appears strong, as wheat tenders were made by Algeria, Iran, Turkey, Jordan and Japan, while Russia considers a downward revision to its wheat export quota.
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However, projected increases in wheat exports from the European Union and easing concerns over the global supply have reined in rising prices.
Canada Western Red Spring (CWRS, 13.5 per cent protein) wheat prices were up $7.40-$8.90 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices were between $457.10 in southeastern Saskatchewan and $478.90 in northern Alberta.
Quoted basis levels ranged from between $79.80 and $101.60 above the futures when using the grain company methodology of quoting the basis as the difference between U.S. dollar-denominated futures and Canadian dollar cash bids.
Accounting for exchange rates and adjusting Canadian prices to U.S. dollars, CWRS bids were from US$357.60 to US$374.70 per tonne. Currency-adjusted basis levels ranged from US$2.60 to US$19.60 below the futures. If the futures were converted to Canadian dollars, basis levels would be $2-$15.40 below the futures.
Average Canada Prairie Spring Red (CPSR, 11.5 per cent protein) prices increased $6.80-$8.50 per tonne. The lowest average bid for CPSR wheat was $405.90 in southwestern Saskatchewan, while the highest average bid was $426.80 in northern Alberta.
Average Canada Western Amber Durum (CWAD) prices rose $6.80-$12.60 per tonne with bids ranging from $726.10 in northwestern Saskatchewan to $737.70 in western Manitoba.
The March spring wheat contract in Minneapolis, off of which most CWRS contracts in Canada are based, was quoted Thursday at US$10.2675 per bushel, 4.5 U.S. cents higher than the previous week.
Kansas City hard red winter wheat futures, traded in Chicago, are more closely linked to CPSR in Canada. The March K.C. wheat contract was quoted at US$8.0375, up 7.25 U.S. cents.
The March Chicago Board of Trade wheat contract lost three U.S. cents from the previous week at US$7.705.
The Canadian dollar lost one-half of a cent from the previous week to close at 78.24 U.S. cents on Thursday.
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
